1951-10-25

[Stage Direction]
On the orders of the day:
Mr. Charles Henry (Rosedale):: I have two questions to direct to the Minister of National Health and Welfare. The first is: What new procedure has been or will be brought into force concerning the rearrangement of government annuities or industrial pensions in conjunction with the $40 monthly universal pensions payable at age 70-


Some hon. Members:: Question.


Charles Henry: -as the result of the speech of the Minister of National Health and Welfare at Vancouver in September, 1951?


Mr. Speaker:: Order. Will the hon. member put his question.


Charles Henry: The second question:	Is it
possible that government annuities or industrial pensions of $50 each monthly at 65 may be increased to approximately $75 monthly or more for life through the inclusion of the universal $40 monthly pension at 70?


Hon. Paul Marlin (Minister of National Health and Welfare):: The hon. member gave me notice of his intention to ask questions of this sort. With regard to the first question, if he will allow me I will deal with that when I make my statement later today. With regard to the second question, I would answer at this stage that it is possible but I will expand my answer later.



COST OF LIVING


[Stage Direction]
On the orders of the day:
Mr. George H. Hees (Broadview):: I should like to direct a question to the Prime Minister. Would the Prime Minister care to comment on a dispatch appearing in this morning's Ottawa Citizen-


Some hon. Members:: Question.


George Harris Hees: -from the Canadian Press-


Mr. Speaker:: Order. Perhaps the hon. member will put his question without quoting the dispatch.


George Harris Hees: -in which an official of the United States price stabilization office says that the cost of living in Canada has risen-


Some hon. Members:: Order.


George Harris Hees: -nine times as much in Canada as in the United States during the first six months of this year?
Right Hon. L. S. Si. Laurent (Prime
Minister): No, the Prime Minister would not care to comment.


An hon. Member:: I am sure he would not.


Mr. Speaker:: When the Speaker suggests that hon. members abide by the rules it is customary that they do so.



THE ROYAL TOUR


[Stage Direction]
On the orders of the day:
Mr. William Bryce (Selkirk):: I should like to direct a question to the Prime Minister. In view of the tremendous disappointment felt at Winnipeg because the disabled veterans-


Some hon. Members:: Question.


William Scottie Bryce: -at Deer Lodge hospital were unable to see the royal couple, will the Prime Minister-


Some hon. Members:: Question.


William Scottie Bryce: -see if arrangements can be made for them to make a brief stop-over at Winnipeg on their return trip so that the veterans may see Their Royal Highnesses?


Mr. Speaker:: Order.


William Scottie Bryce: Mr. Speaker-


Mr. Speaker:: I made certain remarks a moment ago suggesting that members should abide by the rules especially when the Speaker brings the rules to the attention of the house. May I suggest to the hon. member that he put his question as briefly as possible.


William Scottie Bryce: Yes, Mr. Speaker. Will the Prime Minister see if arrangements can be made so that the veterans at Deer Lodge hospital may see Their Royal Highnesses on their way back?

Inquiries of the Ministry


Right Hon. L. S. St. Laurent (Prime Minister):: The Prime Minister has taken very little responsibility in arranging the itinerary of the visit of Their Royal Highnesses. This has been discussed by a committee that was set up to confer with the secretary of Her Royal Highness, Princess Elizabeth. I am sure that she has endeavoured to do everything she felt was possible to make her visit to Canada an occasion that would be pleasant to as many of our Canadian population as it would be possible for her to see. I am sorry that there are Canadians who, because of circumstances, have not been able to see Their Royal Highnesses, but I think that is inevitable in a country the size of Canada with the short time that was available to Their Royal Highnesses for their visit.


Mr. Coldwell:: No reflection on Their Royal Highnesses.


Louis Stephen St-Laurent: None whatsoever. The time available for their visit has been apportioned in consultation with them, and I know that they have been most anxious to make arrangements that would be satisfactory to the greatest possible number of Canadians.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Hon. Stuart S. Garson (Minister of Justice):: Yesterday the hon. member for Lake Centre asked me whether consideration had been given at this time to increasing the salaries of the Royal Canadian Mounted Police. The commissioner informs me that he has been giving consideration to this subject, and that a memorandum concerning it is being submitted to me for consideration by the government.


Mr. J. G. Diefenbaker (Lake Centre):: could not hear the latter words of the statement the minister just made, and for that reason the question I am about to ask may have been answered. Is it expected that legislation will be submitted to parliament at this session to permit increases in the salaries of the members of the Royal Canadian Mounted Police?


Stuart Sinclair Garson: Obviously the hon. member did not hear my answer because the point I was making was that these matters are ordinarily considered by the mounted police themselves before they reach the minister. When they reach the minister they are submitted to the cabinet, and it is not until they are considered by the cabinet that a decision is made.


John George Diefenbaker: It was reported in the press.


Stuart Sinclair Garson: Yes, it was reported in the press but this communication had not been sent to me as yet, and that is the reason I delayed until today the answering of the question the hon. gentleman asked me yesterday.



TRANS-CANADA AIR LINES QUESTION AS TO NEW CIVIL AIRPORT AT HALIFAX

[Stage Direction]
On the orders of the day:
Mr. S. R. Balcom (Halifax):: I should like to direct a question to the Minister of Transport. Has Trans-Canada Air Lines given high priority to the establishment of an airport at Halifax, and has the Department of Transport approved this project? Are steps being taken to meet this requirement?


Hon. Lionel Chevrier (Minister of Transport):: The hon. member was kind enough to send me notice of his question. The answer to the first part is yes. Both my officials and Trans-Canada Air Lines recognize the desirability of proceeding with a new civil airport at Halifax. Plans to this end are in hand, but the date of construction will depend on budgetary considerations and particularly defence priorities.



OLD AGE SECURITY TO PROVIDE FOR PENSIONS, WITHOUT MEANS TEST, AT AGE 70

Paul Joseph James Martin: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide for the payment of pensions, without a means test, of forty dollars a month to persons who have attained the age of 70 years and have appropriate residence qualifications, and to establish a fund made up of special contributions levied for that purpose.


Mr. Fleming:: Is the minister not going to make a statement at this juncture?


Paul Joseph James Martin: This resolution which I am now proposing and which will be warmly welcomed demonstrates our adherence to the principles of social justice.
It is put forward at a time when the weight of national and international responsibilities for joining in firm measures to preserve our way of life lies heavily upon our people.
This measure marks our resolute determination to give new meaning and value to cherished concepts and to press forward towards our ideals of social betterment.
fMr. Bryce.]

It will expedite matters and facilitate discussion if, at this stage, hon. members are acquainted with the main outlines of the government's proposals.
The legislation which will be introduced following adoption of this resolution represents the culmination of a quarter-century of public concern and governmental action and planning with respect to the needs of our senior citizens.
Exactly 25 years ago the first attempt in our country's history to enact old age pension legislation was rejected in the other place, after receiving the approval of this house.
Twenty-four years ago last month, in September, 1927, the first old age pension cheque was issued in the province of British Columbia following the reintroduction and passage of the federal legislation which had been rejected in the previous year.
It is a far cry from those days to the present. The quarter-century that has elapsed since then has taken us through a great economic depression, a second world war, and, following that, years of unremitting international tension.
This same quarter-century has witnessed the birth, growth and development of a comprehensive social security program for all Canadians-the Unemployment Insurance Act, the Family Allowances Act, the veterans' charter, the national health program, and other additions and extensions to the health and welfare services provided at public expense by and for the people of Canada.
The reason for all these developments is not far to seek. They have been the inevitable response to a growing awareness of social need among our people, to an increasing acceptance of the principles of social justice, and to an enlarging sense of social responsibility on the part of Canadians in common with like-minded people in other democratic countries throughout the world.
Each of the measures to which I have referred reflects parliament's awareness of this attitude, as manifested in the formulation of legislation responsibly conceived and designed to meet the social needs of the times in which we live.
In all that we have thus far accomplished, we can take a justifiable measure of pride.
But I can say with confidence that of all the social legislation which this parliament has passed the measure which is envisaged in the resolution before us today is the one in which in future years we will take the greatest pride.
Old Age Security
It represents, I believe, the most constructive approach to the problem of social need amongst our senior citizens that this or any other country has yet devised.
At the same time, I believe that the house will agree, when the legislation is placed before it for consideration, that it represents a practical and responsible approach to this problem.
To these criteria we must attach the greatest importance; for in all our efforts to achieve social justice through such measures as this, there is one thing that we must never forget. There is no magic formula for social security. It can be provided only through work. It cannot be too strongly emphasized that social security has to be paid for out of production. It is the people themselves who -through their hard work-provide governments with the financial resources to maintain these social services.
The weight of each new sociai measure must be considered in relationship to the need for it and to the capacity of Canadian income earners to carry this added responsibility. To overburden our working force endangers the stability of our economy- which provides the primary basic security that individual social measures can only serve to reinforce.
Social security is not an end in itself- neither is it a dead-end. While each social measure takes from production, it gives something back. Since it invests some of the wealth of the nation in its own citizens, a responsible, sensible program of social security can help to raise their levels of health and standards of living, and-most important of all-to maintain their faith in our society and in its integrity.
It is my firm belief that the new old age security legislation foreshadowed by this resolution takes fully into account these considerations.
Certainly no legislation has ever been more carefully or fully considered in advance of its presentation.
No social problem has ever been examined more carefully or objectively than this problem of old age security was examined by the all-party parliamentary committee established to study it in 1950.
I do not need to remind the house of our indebtedness to the members of that committee, and in particular to the co-chairmen, the hon. member for Montmagny-L'Islet (Mr. Lesage) and Senator King, for the careful and conscientious study which they gave to this important problem. The objectivity and impartiality of their work and of their findings was in the highest traditions of a democratic parliament. It must be a matter

Old Age Security
oi great satisfaction to Senator King, sitting in the gallery today, to recall that as Acting Minister of Labour he had the honour of introducing the original Old Age Pensions Act in 1926.
No measure of social welfare has ever been given more widespread and unanimous approval in advance of its actual passage than this measure which, even before its formal presentation to the house, has received unanimous support and endorsation from all parties in the house and from all ten of the provincial governments.
That this is so is not, of course, due to mere chance. The government's objectives in the field of old age security were made known as long ago as 1945 through the proposals which it then made to the provinces with respect to fiscal and social security matters.
The legislative proposals which will be brought forward following approval of this resolution are, in essence, the same proposals on old age security which the federal government advanced at that time. The concept of a universal old age pension, free of means test, which was first advanced in 1945, was then regarded as bold and original. Many persons, some governments included, were not yet ready to accept a proposal which broke so sharply with the traditional means test approach of the past.
At that time, family allowances, the first and hitherto the greatest of these new programs, based on similar principles, had not yet been fully accepted by all political parties, nor even by all sections of the general public.
There were those who said that the government, in its thinking on social questions, was getting too far ahead of the thinking of the people: that the people were not ready for these new and sweeping universal programs.
Since 1945, the widest possible opportunity has been given to study the proposal for universal pensions without a means test which the federal government at that time offered to the provinces.
The parliamentary committee of 1950, with all parties represented, examined every possible plan and alternative.
The fact that after an exhaustive study all parties, and subsequently all provincial governments, unanimously rallied to the support of the universal means-test-free pension plan originally offered by the federal government in 1945 is, I believe, the surest and

soundest endorsement that any legislative proposal could hope to have.
There is equally no doubt that our future experience with the plan on which we now propose to embark will fully confirm the soundness of the collective judgment of all parties and all governments who have thus accepted and endorsed the universal means-test-free pension plan, first proposed by the government in 1945.
The understandable satisfaction that all of us feel regarding the advent of this new program should not, however, cause us to ignore or underestimate the immeasurable contribution made to the well-being of our aged citizens during this past quarter-century by the legislation now on our statute books, which will be replaced by the new Old Age Security Act.
From its beginning, the present Old Age Pensions Act, now in its twenty-fifth year of operation, has been based on the principle of federal-provincial partnership and co-operation, in conformity with our constitutional relationship since 1867. In the Old Age Pensions Act of 1927, this historic alignment of constitutional powers was fully respected by the federal parliament.
The partnership that grows out of our constitutional position has meant that all our governments have become experienced in old age security during the years they have worked together to provide it. We have made a series of amendments to the original legislation, particularly those of 1931, 1937, 1947 and 1949, which have greatly extended both the benefits and the coverage of this important measure for the security of our people.
Through these legislative changes, we have endeavoured to keep pace with progress in our time. In large measure we have been successful in our joint endeavours. The report of the parliamentary committee clearly demonstrated that our present old age pension provisions compare favourably with similar provisions in other countries.
The record of achievement in this field warrants mention of the main accomplishments, because of what I shall have to say later:
(1)	Over the past 25 years, more than
800,000	Canadians have benefited under the Old Age Pensions Act.
(2)	By the time the act is repealed at the end of this year, joint federal and provincial expenditures for old age pensions in Canada will have reached the total of $1,136 million.
(3)	Total federal expenditures on old age pensions will at year's end exceed $836 million, while total provincial expenditures will approximate $300 million.
(4)	In 20 years, the number of pensioners has increased more than fivefold-from

63.000	in September, 1931, to more than
320.000	at the end of September, 1951.
(5)	The annual rate of expenditure under the Old Age Pensions Act has more than trebled in the last 7 years-from $45 million in 1943-44 to $137 million in 1950-51, federal and provincial expenditures combined.
(6)	For the calendar year 1951, the last year in which the Old Age Pensions Act will be in operation, federal and provincial expenditures will amount to more than $141 million.
It is apparent, therefore, that even within the framework of the existing act, much has been done to give an increasing measure of security at least equal to that provided by other countries for their people.
Nevertheless, in recent years the government has become increasingly concerned with two aspects of our present program:
(1)	First, the burden of old age pensions on general revenues of provincial and federal governments has shown a steady and, in recent years, a rapid increase. This increase could be counted on-even if our pensions program were not made more liberal-to continue indefinitely, as our aged population is rapidly increasing.
<2) Secondly, there has been a growing feeling that there are inadequacies in our present program. Inevitably, it places a penalty on thrift.
The belief has been growing that some other system should be found, embodying the principle of special contributions into a fund created especially for the purpose, that would ensure for our aged people in their later years a measure of social protection consistent with dignity and self-respect, and without invidious distinction or discrimination.
Under the present system, those who save for their old age or who benefit in some degree from industrial or other pension plans are in part or wholly excluded by the means test from receiving benefits through old age pensions. At the same time, in addition to those who have been unable-for one reason or another-to save or to continue to earn their living, others who receive full benefit have expended little effort to provide for their later years.
Under a plan involving the feature of contributions, the people as a whole are able to contribute into a special fund established for the purpose, out of which their pensions will be provided. It was pointed out in the 1945 proposals that the means test should be eliminated after reaching 70, as it is regarded as unsuitable for the oldest group in the community-over 80 per cent of whom are not in fact capable of supporting themselves in useful remunerative work.
Old Age Security
I should like to quote the following extract from the proposals, page 38:
Payment of pensions as of right to people of this age offers the best kind of economic security. It removes the fear of destitution much more certainly than any other method, and relieves old people of the necessity of seeking work, or of endeavouring to keep on working in unfavourable circumstances and beyond the age at which they should be able to retire, without dependence on charity or burdening the family.
In addition to providing a minimum subsistence for those with no other resources, this system would enable other persons with moderate private savings to retire from active work sooner, or in more comfort, than would otherwise be possible.
The proposals formulated by the federal government in 1945 with respect to old age security clearly indicated the objectives it had in mind and the results it desired to attain. They pointed, too, in the direction of the kind of program envisaged for the future.
As my colleagues and I have so frequently emphasized in the years since 1945, the broad social objectives then outlined by the federal government have constantly remained in the forefront of its thinking and planning.
The proof that this is so is seen in the fact that there is a very close resemblance between the old age security proposals set forth by the federal government in 1945 and those which we have embodied in the Old Age Assistance Act and the Blind Persons Act already passed at the last session, and in the Old Age Security Act which will follow upon approval of this resolution.
I should like now, Mr. Speaker, to outline the main features of the legislation which this resolution proposes to place before the house for consideration, and at the same time, in view of the important financial commitment, to give to hon. members some indication as to the reasons underlying the proposed new program, and the results which may be expected to flow from it when it is fully in operation.
We have come to the conclusion, after the most careful study of all phases of the problem, that the so-called "universal pay-as-you-go" system of old age security, financed by special contributions into a fund established especially for the purpose, is the system most likely to meet the needs of our aged population 70 years and over, both now and in the future.
This is likewise the conclusion unanimously endorsed by the parliamentary committee in its report to parliament made in June 1950, and indicated in paragraph 51 of the committee's report at page 108:
51. All things considered, therefore, the committee is of the opinion that the most suitable old age security plan for Canada under present circumstances consists of a twofold program, as follows:

Old Age Security
(a)	A universal pay-as-you-go program applicable to all persons 70 years of age and over, based on the contributory principle and administered by the federal government. The benefit should be a flat, uniform amount of $40 a month for all eligible persons, and eligibility should be based solely on age and a suitable residence qualification.
(b)	For the age group 65 and over not eligible for the universal benefit, old age assistance at the rate of $40 a month should be available, subject to an eligibility test in some respects similar to that which exists under the present old age assistance program, but modified to take account of the different characteristics of the age group to which this test is to apply, and adjusted in such a way as to recognize to a greater extent than at present the desirability of encouraging recipients to earn supplemental income.
The second of these recommendations has, of course, already been implemented through the passage of the Old Age Assistance Act which will provide benefits to an estimated
145,000	needy persons between the ages of 65 and 69. The first, which is the major recommendation and the keystone to the entire plan, will be implemented in its entirety with the passage of the legislation forecast by this present resolution.
Consistent with the parliamentary committee's recommendations, the legislation to be introduced provides:
(1)	that the age of eligibility for universal benefit is to be 70 years of age;
(2)	that the only other requirement is that of a reasonable residence period in Canada. Applicants will be required to show that they have resided in Canada for 20 years continuously immediately prior to making application for pension. Alternatively, they will be able to qualify if they can show that they have lived in Canada prior to the last 20 years for periods of time at least double the periods of their absences from Canada during the last 20 years. This latter group of applicants will also be required to show some recency of attachment to Canada, to the extent of one year's residence in the country immediately prior to the date of application. Except for this last-mentioned provision, which is similar to that contained in the Family Allowances Act, and which is intended to discourage former residents of Canada from returning solely for the purpose of receiving the pension, hon. members will recognize that the residence requirements are identical with those provided in the Old Age Pensions Act at the present time and the new Old Age Assistance Act, and in line with the views expressed by the parliamentary committee in paragraph 69 of its report;
(3)	benefits will be payable to aged Indians and Eskimos on exactly the same basis as to other persons-namely, on proof of age and residence;
(4)	retired employees of industrial or commercial corporations, of municipal, provincial and federal governments, retired missionaries, members of the clergy and of the religious orders will all be included;
(5)	disability pensioners and recipients of war veterans allowances will be eligible to apply, subject to the same conditions and on the same basis as the other groups that I have mentioned.
I have mentioned these groups in particular because there appears to be some uncertainty in certain quarters as to whether these special categories of persons will be eligible for the universal old age pension on the same basis as the rest of our aged population. Some of them have withheld their applications in the belief that they are not to be included in the new scheme. I would urge such persons to apply without delay, in order to ensure prompt payment of any benefit to which they may be entitled beginning January 1952.
(6)	The benefit to be paid will be at a flat uniform rate for all, of $40 a month, as recommended in the committee's report;
(7)	benefits will in all cases be provided as a matter of right, without any form of means test. There will be no provisions of any kind for subsequent recovery out of the estate of a deceased pensioner, nor for any liens to be placed against his property.
The omission of any provision for liens or for recoveries from estates is consistent with the policy adopted when the Old Age Assistance and Blind Persons acts were passed at the last session of parliament. It is in conformity, too, with our conception of this new program as one supported in significant measure by personal contributions.
I might point out in this connection that even under the existing Old Age Pensions Act the federal government has never at any time required the filing of liens against the property of a pensioner.
Some provinces have followed the practice in the past of filing liens against the property of an old age pensioner in order to secure their subsequent claims against his estate. This has been done under the authority of the provincial legislation; it has never been a requirement of the federal law;
(8)	the program will be administered exclusively by the federal government and will be its exclusive financial responsibility. The provinces will not be required to finance any part of the costs involved, nor to bear any portion of the administrative expense or responsibility;
(9)	the estimated costs to the federal government in the first year of operation of the Old

Age Security Act will amount to $343 million, with the number of beneficiaries rising from 700,000 in January 1952 to 730,000 in December of the same year. In addition to this, the federal share of old age assistance payments to 145,000 persons aged 65 to 69 will amount to $32 million in 1952, and the federal share of allowances to 8,000 blind persons will amount to $3 million.
In other words, total federal expenditures in 1952 under these three enactments, replacing the existing Old Age Pensions Act, will amount to $378 million, as compared to an estimated $106 million for old age and blind pensions in the current calendar year.
Provincial costs, on the other hand, which will amount this year to $35 million or more, are expected to diminish slightly to $33 million in the calendar year 1952-$32 million for old age assistance, $1 million for the blind.
(10)	the program will be financed on a "pay-as-you-go" basis; that is to say, sufficient funds will be provided each year by special contributions and earmarked taxes, as recommended by the committee, to pay the cost of pensions for that year. A special fund will be established, to be known as the old age security fund, out of \vhich the pension payments will be made.
The government believes, after careful study of the various alternative plans in other countries, that in adopting a program of the kind which I have outlined, we will be providing for our people a simple, clear-cut and equitable plan for old age security which will not be surpassed by that of any jurisdiction I know of.
These alternative plans have all been given the most intensive study, both by the parliamentary committee and by the government itself.
Some of them, like the United States and Swiss programs, adhere somewhat more closely to the pattern of commercial insurance, based on modified actuarial principles and limiting benefits solely to those persons who have made the required contributions.
Such systems fall far short of universal coverage to which we attach the highest importance and on which the parliamentary committee placed the greatest emphasis; while suited to the needs of the industrial wage earner, they exclude inevitably large sections of the population, particularly the farmers and other groups of self-employed. Even for the industrial wage earner, such systems take many years to mature and benefits in the first ten years or more are nominal in amount. The result is that side by side with such schemes a large continuing program of means-test pensions is and must be maintained for
Old Age Security
many years to cover the needs of those who cannot be brought under the scheme, and to supplement the benefits of those who do come under it.
Let me repeat. Where such a system operates, two programs exist indefinitely side by side:
(a)	a system of insurance benefits, paid as of right only, to those who have made the required contributions; and
(b)	a system of old age assistance, based on a "means test" for those who cannot so qualify.
The universal pay-as-you-go system which the government is now proposing makes no invidious distinction-as such systems in effect in some other countries do-between those who have made a stipulated number of contributions over a period of years and those who have not.
It should be noted, too, that in many of the countries where such systems are in existence-notably the United States-the entire costs of the program, apart from actual administrative expenses, are borne by contributions levied on the employers and the employees. In contrast to this, the program here proposed calls for a substantial contribution to be made through earmarking directly into the fund certain existing tax revenues.
Certain other countries whose systems we have examined establish their old age security fund on the basis of an actuarial reserve, instead of financing on a pay-as-you-go basis. We do not believe that this is necessary, or that it accomplishes any useful purpose. The cost of pensions in the final analysis, whether financed on an actuarial reserve basis or not, must be met, in terms of the food, clothing, shelter and health care which these pensions buy, out of the current production of the country. This leads inevitably to the conclusion, particularly with reference to any pensions program that is universal in its scope, that the simplest, most direct way of reflecting and of meeting these costs is to pay them annually out of current production.
I am satisfied that the house will find, on examining our proposed new program, that on the score of universality, general coverage of persons benefited, general adequacy of benefit, absence of a means test, simplicity of administration and frank recognition of the cost of old age security as a charge upon the nation's current production, the new plan here proposed stands in the very forefront of all comparable programs throughout the world today.
I am equally certain that it will prove to be the program best suited to the needs of



J34 HOUSE OF COMMONS

[Stage Direction]
Old Age Security
our own Canadian people-and this, when all is said and done, is the truest test of what we are here attempting to accomplish for our people.
What, then, will be the results of the new program when it comes into operation, in January, 1952, after approval by this parliament?
1.	It will abolish the means test for some
320.000	persons presently in receipt of old age pension on a means test basis.
2.	In addition to this, some 380,000 individuals not presently in receipt of pension will benefit for the first time under the provisions of this new legislation, making a total of
700.000	persons in all to benefit from the provisions of the Old Age Security Act in the first year of its operation.
3.	When, to this total of 700,000 persons 70 years of age and over, we add 145,000 persons who will benefit under the provisions of the Old Age Assistance Act passed in June of this year and 8,000 persons'under the Blind Persons Act passed at the same time, we find that no less than 853,000 aged and blind individuals in Canada will be covered by the legislative program being implemented this year to replace the existing Old Age Pensions Act.
4.	The benefits under this new legislation will provide an invaluable foundation on which hundreds of thousands of Canadians can build for themselves their own retirement security programs. This will be done in many ways: through commercial or government annuities, through the establishment or adjustment of industrial pension plans, and through a wide variety of other personal savings programs.
I am sure that as this new program comes to be integrated into the existing pattern of retirement provisions provided by individuals, by employers and in other ways, it will be recognized for what it is intended to be-not as a total retirement security scheme in itself, replacing and supplanting all others, but as the core, the keystone of a national savings and retirement plan, around which each individual in this country will be encouraged to build his own retirement security program in a manner and to an extent peculiarly suited to his own needs.
My colleague, the Minister of Labour (Mr. Gregg), will shortly be revealing to this house the manner in which it is proposed to modify the government annuity scheme so as to fit into this new pattern.
Through amendments which will be introduced to the Government Annuities Act, facilities will be offered to permit individuals

or groups purchasing government annuities to integrate their annuity purchase plans with their old age pensions in such a way as to provide a substantially higher monthly amount on retirement than has hitherto been possible.
Let me take as an example the case of an individual who has purchased a government annuity providing $50 monthly beginning at 65. On reaching his 65th birthday, such an individual will receive a monthly payment of $50 from his annuity alone, altogether apart from any other income or resources he may possess. If he has no other income or resources, he may be eligible for additional assistance under the Old Age Assistance Act, amounting to $10 monthly in the case of a single person, or the full $40 if he is a married person. But this will, of course, depend on his undergoing a test of need. I think I am answering in part the questions put to me by the hon. member for Rosedale (Mr. Henry).
At the end of five years, on reaching his 70th birthday, the annuitant will find his monthly annuity of $50 augmented by the $40 monthly benefit to which he will then become entitled as of right under the Old Age Security Act. His assured income will then be $90 monthly and he will be able to count on this continuing for the rest of his life.
It will be clear from what I have said that an individual in the position I have described will have considerably less in the way of assured income from his annuity during the first five years of his retirement than he will have from the annuity and pension combined when he has reached 70.
Many persons on finding themselves in these circumstances would naturally prefer to rearrange their personal retirement program so as to provide for themselves at no additional cost a higher, uniform amount from 65 years onward.
This is exactly what the amendments to the Government Annuities Act will make possible. Provision will be made for the purchase of a new type of annuity, to be known as "term annuities", in addition to the life annuities presently purchasable. These will be made available both to individuals and to groups, so that employee pension plans as well as individual programs can be rearranged along the lines I have suggested.
An individual will shortly be able to purchase, for example, a 5-year term annuity of, let us say, $40 monthly beginning at 65 and continuing until his 70th birthday when he will be eligible for a pension in the same amount under the Old Age Security Act. At the same time, he will be able to purchase a life annuity of, say, $35 monthly, beginning

at age 65 and continuing throughout his lifetime. The figures I use are merely illustrative of what might be done: the amount of the term and life annuities could, of course, be lower or higher and could commence at an earlier or later age if so desired.
The combination of a term annuity and a life annuity which I have used by way of illustration will cost approximately the same as the present cost of a life annuity of $50 monthly at 65. The result will be that through the combination of these term and life annuities with the old age pension payable at 70 the individual who wishes to do so may provide for himself a uniform monthly benefit of $75 from 65 years of age onward, instead of having to content himself with $50 in the initial period from 65 to 70, and then finding his monthly income after 70 increased to $90.
I may say that industry and labour have shown great interest in this question of the proper integration of their present plans with the new old age security legislation. Already the departments of National Health and Welfare and of Labour have had numerous inquiries concerning them. I believe that a number of life insurance companies are also considering an adjustment of their annuity plans to achieve results similar to these which will be achieved through the proposed amendments to the Government Annuities Act which I have mentioned.
These examples I have given are illustrative of what I mean when I say that the result of this new program will be to encourage individuals, either alone or in concert with their employers, to build upon this basic provision offered through governmental action a retirement program suited to their individual needs. The sum total of these individual efforts will, I am sure, yield significant results in terms of the encouragement given to national thrift and national saving.
The house will recall that in anticipation of this present legislation, authority was given in June of this year to proceed with an advance registration, in order to ensure prompt payment of pensions with the commencement of the new year.
From questions which have been asked from certain quarters of the house, hon, members will, I know, be anxious to hear what progress has been made towards achieving our objective in the three months since we last met. Remember there are three months still to go.
Arrangements have already been completed to take over, without interruption, 94699-25
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from provincial old age pension rolls approximately 320,000 persons who are now in receipt
of means test pensions. For these, no new application will be necessary. Special provision is made in the new legislation to cover this automatic transfer, and administrative arrangements have already been completed to ensure the smoothest possible transfer of these present pensioners to the new federal rolls in January next.
The balance, numbering approximately
380,000	persons 70 years of age and over, are not presently in receipt of old age pension.
For these, a new and simple application form has been made available through all post offices. Already, as of October 24, 284,239 applications have been received from this group in our 10 regional offices, and applications are continuing to flow in at the rate of 9,000 weekly.
If this rate continues, and we expect it will, we can count on having almost complete registration by the end of the year.
To sum up, as of yesterday, we were in a position to put into pay immediately approximately 494,000 claims out of an anticipated 700,000.
We are now approving 15,000 to 20,000 applications weekly, about twice the rate of new applications now being received. At this rate we are rapidly catching up on the backlog of applications now in our hands and should be in a position to dispose of all of these which do not present particular difficulties by the end of the year.
Instead of there being confusion, the officers of the treasury and of the Department of National Health and Welfare deserve from me today, as one of the ministers concerned, a special word of tribute for the work they have done. The work has taken many long hours of overtime during these past few months, particularly in the summertime, to accomplish this enormous administrative task. The work has been undertaken by the employees of our 10 regional family allowances offices with a very modest addition to existing staff. The additional personnel required on a continuing basis totals only 123 persons spread over our 10 regional offices. Only one additional person has been added to the headquarters staff here in Ottawa.
The figures which I have mentioned regarding the volume of expenditure and the number of persons who will benefit give evidence as to the comprehensive nature of the program which the government is proposing for the greater security and well-being of our aged people. Mere statistics, however, are totally
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incapable of portraying the real scope of this program in terms of its social and human implications.
If we are to gain a true impression of what we are accomplishing with this measure, we must look behind these statistics and remember that they comprise not just a vast army of unknown persons but a true cross-section of our Canadian people. These people are our own neighbours, relatives and friends, retired school teachers, missionaries, clergymen, factory workers, railway workers, farmers, fishermen, civil servants, retired members of our police and fire departments, office workers, clerks, housewives and so on, all of them persons who have made their contribution to the building up of this country and who have made it possible to achieve the greatness which is recognized as Canada s in the world today.
The cost of this new program, measured in terms of the nation's economy, will be a large one. For 700,000 aged persons, 70 years of age and over, we will be providing as much in the way of retirement security as we are now providing through family allowances for
4,500,000	of our nation's children. This is a heavy financial burden on all the productive forces of this country.
I should say, with reference to the important question of how this cost is to be met and the methods to be adopted for financing of the program, that, as it will be recalled, the parliamentary committee offered certain helpful observations on this question but made no specific recommendation. As the committee stated in paragraph 67 of its report, it did not consider that it was part of its responsibility to do more than to indicate possible forms of contribution. "The raising of revenues", it went on to say, "is a technical problem which bears a close relation to fiscal policy in general". I will leave it to my colleague, the Minister of Finance (Mr. Abbott), who will follow me, to outline the details of the methods to be adopted in financing this new program. I have said that this is a heavy financial burden on all the productive forces of the country. It may be said: Why then are we bringing in this new legislation? I think I may summarize what all of us feel is basically the reason.
Today, our way of life hangs in the balance as never before. We are disturbed by a challenge flung at us by the proponents of an alien and heartless system who claim that only by that system can economic and social justice be assured to the great masses of the people of the world. This present measure, together with others of its kind, is part of our answer in Canada to that challenge. It cannot, of course, be our only answer. We must

continue, as we are now doing, to work for peace and to strengthen our defences so that, if necessary, we can defend our way of life by force of arms against attacks which could be launched upon us. In the long run, however, it may well be that this kind of measure will demonstrate the capacity of the free world, and of us as a free people, to provide security with opportunity for our people within the framework of individual and political freedom.
This is indeed the true testing point of social democracy as we know it in the free world today. The preparations we are now making to maintain and strengthen our national defences, the sacrifices we are asking of our people for this purpose, the measures we are proposing to buttress our social democracy here at home, all these have the same objective, the same end in view. Our objective is to build for our people a secure and free way of life which will enable them to live with their neighbours in peace and enjoy the fruits of their own industry. The security which we will be providing for our aged people through this measure is consistent with this great objective, for through it we are providing security with, and not at the expense of, freedom.
Hon. Douglas Abbott (Minister of Finance):: My colleague, the Minister of National Health and Welfare (Mr. Martin), has indicated to the house the main features of the government's plan for old age security. He has had the pleasant duty of outlining the manner in which pensions of $40 a month for persons 70 years of age and over will become a reality in Canada next January. I, Mr. Speaker, am left with the somewhat less agreeable task of having to talk now about how the cost will be met.
While none of us, I think, would want to do less for our people in making provision against need in old age, yet at the same time we cannot escape squarely facing the fact that the burden of this duty we are voluntarily assuming is not a light one. Let no one be under any misapprehension about this. As the Minister of National Health and Welfare pointed out, the cost is heavy. There is no magic in government finance. A dollar paid out to one person must first of all be taken away from another. Unfortunately the logic of this simple proposition has never been successfully refuted.
The plan for federal old age pensions just outlined by my colleague will cost, it has been estimated, $342 million annually, but in the first year we believe that for various reasons the cost will fall somewhat short of that amount. For my present purposes I am assuming that for the first complete fiscal year

oi the plan, namely, 1952-53, the cost will not exceed $330 million. Of course, as has been pointed out, we are at present contributing substantially to the cost of provincial pensions now being paid on a means test basis to persons over 70. This year that contribution will be about $110 million; next year it would have been about $117 million. Accordingly, the figure of approximately $342 million which I just gave as the total cost of the new federal pension for next fiscal year does not mean that this much new money has to be raised. The additional cost to the federal treasury in paying pensions direct to those over 70 will amount to about $225 million a year with full participation, and we estimate about $213 million next year. However, as the house is aware, the federal government has offered to pay to the provinces one-half the cost of their means test pensions to persons in the 65-69 age group. This might cost the federal treasury $35 to $40 million a year. Thus, the over-all additional cost to the federal treasury of the new system will be around $250 million next year, and under the new arrangement the federal government will be paying out for old age pensions and assistance together a total of about $365 million a year or $1 million every day of the year.
The legislation to be introduced will establish, as my colleague has indicated, a special fund to be called the old age security fund. Pensions will be charged to this fund and the revenue from certain taxes will be credited to it. The taxes in question will be specifically levied in the old age security legislation rather than in the ordinary revenue acts which authorize the raising of funds for general governmental purposes.
Perhaps it would be useful in order to avoid any possible misunderstanding if a few words were said about the basic principles on which the Canadian plan as set up will operate. It has been described as a universal pay-as-you-go system as distinct from old age assistance such as we now have, or from a system of old age insurance such as has been adopted by some other countries. The plan here proposed has also been described as a contributory system in the very real sense that certain special taxes are to be imposed and earmarked to support the fund. This is in contrast with an arrangement under which pensions would constitute a general charge on ordinary government revenue. It was never contemplated, of course, that there would be a separate account set up for each individual as under an insurance scheme. Rather, the system recommended is individual contributions to a general fund to be used for those who live to qualify for a pension.
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This arrangement is, I think, sensible and practicable, and carries out the ideas of the various organizations which made representations to the joint parliamentary committee. On page 69 of the report, the committee made this statement:
The use of specific earmarked contributions for old age security purposes was supported by all organizations discussing possible revenue sources. It was repeatedly emphasized that all Canadians should have a direct and conscious financial responsibility in the provision of old age income security, and should be made aware of their responsibility to meet the costs through an earmarked device. Most of these organizations would utilize general revenue in conjunction with these earmarked taxes.
The establishment of a special fund isolates clearly and definitely the cost to the country of providing old age security and, with the supporting taxes levied in the statute under which the pensions are paid, it becomes abundantly clear to everybody that the government has no income of its own but can only pay out with one hand such money as it takes in with the other hand by taxation. It is made very obvious that the contributory principle is being followed.
Having determined the general principles on which the fund should operate, the next major question to decide was what form of taxes should be used to provide revenue for the fund. Needless to say, this was no easy problem. AH the various plans suggested to the joint parliamentary committee were thoroughly examined and the merits of each were carefully explored.
Perhaps the most frequently mentioned plan was one which involved a payroll tax. To be fair, a payroll tax should, of course, fall on every employer in the country, large and small, and regardless of the nature of their activities. In many directions it seems utterly impracticable to secure complete coverage. I need only mention provincial and municipal governments, hospitals, school boards, universities, churches, charitable organizations, etc., to illustrate the sort of difficult problems which would be encountered under a payroll tax, and the resulting hardship that could fall on some of these groups. Exemptions for particular groups would inevitably lead to hard feelings and dissatisfaction, and rightly so.
Such a tax would also, I think, be fundamentally unsound for Canada in that it would increase production costs for our exporters. This should be guarded against in the interests of our trading position. New government machinery would have had to be set up to administer a new tax of this sort. This would be expensive and would put a further strain on our manpower resources. All in all it seemed quite clear

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that the idea of a payroll tax, while having some desirable features, would have to be discarded on other grounds.
I shall not burden the house with the results of considering various other miscellaneous kinds of taxes. It will be sufficient to say that in the final result, after surveying the whole field, it seemed most sensible to utilize the main taxes which at present support our revenue systems, namely, sales tax, individual income tax and corporate tax.
It is proposed that the old age security act will impose these three kinds of taxes and they will be levied on what for convenience I might describe as the 2-2-2 formula. This means a 2 per cent sales tax, a 2 per cent personal income tax and a 2 per cent tax on corporate profits. I shall comment briefly on each of these items.
The 2 per cent sales tax levied in the oldf age security act will not be in addition to the present 10 per cent sales tax. Concurrently with the enactment of this tax in the old age security act, effective January 1, 1952, provision will be made for a reduction from 10 per cent to 8 per cent in the rate under the Excise Tax Act. In effect, a 2 per cent sales tax is being transferred from one act to another with no change in the over-all rate. I estimate the revenue from this source should amount to about $145 million next year.
The sales tax more nearly approaches the ideal levy for financing social security than any other tax in our system. Where under social security provisions the benefits are to be universal it is only right that contributions to the fund should likewise be universal. Income tax, incidentally, reaches, I believe, only about half of our working population. It seems clear that all should take at least some part, however small, in making provision against need.
Contrary to much that has been said in this house and elsewhere about our sales tax, it does not discriminate against low income groups. The figures which I placed before the house last spring show that in the lower ranges of income the tax is progressive rather than regressive. What is frequently overlooked is that practically all foods are exempt from sales tax, all fuel is exempt, building materials are exempt, and through wide income ranges not more than one-third of consumer expenditure is on goods subject to sales tax. I apologize, Mr. Speaker, for having to repeat these truths and I do so only because of confusion that still seems to be prevalent in the minds of many who quite unfairly, I think, continue to criticize the use of this tax for general revenue purposes.

For purposes of financing social security, there is even less basis for the sort of objections that have been made. Taxation for social security finds justification in the benefit principle of taxation. All pensioners, rich and poor, receive equal benefits. From this it could quite reasonably be argued that all should make equal contribution towards the fund, but such a system might be regarded as harsh and impracticable. Under the sales tax method of financing, the burden through a wide income range will be roughly proportional. For example, the $6,000 a year man will be contributing by means of sales tax about three times as much toward his $40 a month pension as the man with the $2,000 a year income. The $10,000 a year, man will similarly be paying about ten times as much for his pension as the $1,000 a year man. In the light of these facts, I suggest that any argument about unfairness of using sales tax for financing old age pensions is not very impressive.
The proposed personal income tax will be in addition to the tax at present in force. A special levy of 2 per cent on taxable income will be imposed with a ceiling of $60 on the amount of the tax. That is to say, the social security tax will be 2 per cent of taxable income or $60 a year, whichever is the lesser. The intention is to have a separate item on the income tax form identifying this special tax. This will not come into force until _ July 1, 1952. For the first year as a whole, then, the tax will be only 1 per cent with a limit of $30. The change in the withholding rate by employers will be on the basis of a 2 per cent tax commencing in the middle of the year.
I might explain why the coming into force of this tax has been delayed by six months. In my budget last spring, I resorted to the use of surcharges in the income tax field. This was a temporary device to bridge a period of extreme uncertainty in the international situation. It was hoped that by next spring we should have a clearer view of the prospects. Accordingly, I stated that my tax proposals of last spring were to be regarded as an interim policy for the period of the current- year. I then said, and I quote:
If our optimistic hopes are realized, it will be easy to reduce these surcharges or to drop them entirely, but I want to add that if it becomes clear that we are in for a long pull at these high levels of expenditure, some major changes in the existing tax structure may have to be devised.
My present intention in my next budget is to discard the device of the surcharge and to embody direct in the income tax structure such a level of taxation as appears to be necessary in the light of the situation next spring. Whatever seems necessary at that time will constitute the new rate structure.

It is no secret, of course, that current revenues are exceeding somewhat my expectations of last spring due to a higher level of national income and production than anticipated. However, I shall look at the picture next spring in the light of expenditures for the year and shall decide at that time what to recommend. Certainly I make no predictions now as to what the budget of next spring will have in store for us. The present point is that there will be at least a technical revision of the income tax rate structure in the process of removing the surcharge as such, and in order to avoid having to require employers to change their tax withholding tables twice in a six months' period with all the inconvenience and confusion to which that would give rise, it seemed preferable to postpone the coming into force of the 2 per cent social security tax so that the one revision of the tax withholding tables could give effect to both changes at the same time. The point I should make quite clear is that whatever happens to the ordinary income tax-whether it is abolished completely, cut in half, or doubled-there will be in existence a 2 per cent special tax for old age security. The same thing, of course, applies to the 2 per cent sales tax and the 2 per cent tax on corporate profits. On a full year basis, this 2 per cent additional on taxable income of individuals should yield approximately $95 million.
The third item of revenue in the old age security legislation will be an additional 2 per cent on corporate profits effective January 1, 1952. It is expected that this tax will produce approximately $65 million in a full year.
At present the tax on corporations is 15 per cent on the first $10,000 of profit and 38 per cent on the excess with a 20 per cent surcharge on the 38 per cent rate only, making the effective rate of 45-6 per cent on profits over $10,000. The additional 2 per cent will bring the rates to 17 per cent on the first $10,000 and 47-6 per cent on profits above $10,000. In addition to the federal tax there are corporate income taxes of 5 per cent in the eight provinces with which we have tax agreements, and taxes of 7 per cent in Ontario and Quebec.
I have made no secret of my concern over a system of taxation under which more than half of company profits are taken away by governments. The effects on incentive and efficiency can be extremely dangerous at a time when maximum output and economy in operations is so important as it is today. As in the personal income tax field, my intention is to recommend the repeal of the surcharge, as such, on corporations in my next budget
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and I shall decide, in the light of circumstances at that time, what rate structure to recommend for the calendar year 1952.
The tax program which I have just outlined for supporting the old age security fund is broadly based and is, I think, a fair one. Moreover, efficient administrative machinery for collection already exists. Taken together, these taxes form a pattern which is sound and as nearly equitable as possible.
Earlier in this statement, I mentioned that the new federal pensions would involve an expenditure next year of the order of $330 million. lit might even be as low as $320 million. The three taxes supporting the fund can be expected to produce an annual flow of revenue of, say, $300-$310 million. Accepting these figures as tentative and approximate, the fund may show a small deficit for the first full year. -
As payment of the new federal pensions will begin in January, 1952, I estimate that outlays in the current fiscal year-that is for the year ending March 31, 1952-will be about $80 million. Receipts from the 2 per cent tax on sales may amount to $30 million. I should not expect that there will be any appreciable collections of the 2 per cent tax on corporations during that three month period, and, as the 2 per cent personal income tax is not effective until July 1, there will, of course, be no receipts from this source in this fiscal year. Consequently, disbursements out of the old age security fund during the current fiscal year may exceed receipts by as much as $50 million at March 31, 1952. Moreover, because of the time-lags which I have referred to, the full yield of the three old age security taxes will not be reflected in 1952-53, and the fund may show a larger deficit at March 31, 1953.
To meet such a deficit, there is a special provision in the proposed legislation whereby the Minister of Finance may make temporary loans or advances so that pensions chargeable to the old age security fund may be paid. However, he is also required to review annually the state of the fund, and, if he is of the opinion that the receipts are or will be insufficient to pay the charges thereon, including the repayment of any temporary loans, to indicate what measures he recommends for increasing the revenues.
At budget time next spring, I hope it will be possible to assess the picture more accurately to ascertain whether the current inflow of receipts will be sufficient to cover current charges, and to consider whether anything special should be done to provide for the deficit which will have developed during the

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early months of the fund's operation when the full yield of the old age security taxes was not yet available.
The purpose of the provisions to which I have just referred is to ensure that the fund, at least after the first few months, will be self-sustaining and that the revenue sources are sufficient to ensure an adequate flow of income to meet the pension payments and the repayment of loans. This is the basic principle on which it is proposed to operate the fund.


Donald Methuen Fleming: Mr. Speaker, in some of its most important sessions parliament does its work in an atmosphere of high controversy. On other occasions parliament does some of its best work in an atmosphere of unanimity. Whatever may be said about the speech which has been made by the Minister of Finance (Mr. Abbott), one may say without reservation that this is an occasion when parliament will address itself to the accomplishment of a high aim in a spirit of unanimity. We of the official opposition hail the introduction of the measure which has been outlined in the resolution now under discussion. We are glad to see that action may now be taken by parliament in the direction indicated in that resolution. In it we see an achievement of all parties in the house. We see this as an occasion when all parties have addressed themselves to great national responsibilities, with the highest sense of responsibility as political parties serving the common weal. And there is a great sense of satisfaction, I am sure, in all parties in this house today that we are now to be permitted to take a long step forward toward the goal that all parties in this house have subscribed to.
This spirit of unanimity, as we approach this goal, is unquestionably the fruit of cooperation on the part of all parties in this house. That spirit of co-operation was abundantly manifested in the committee of both houses of parliament which sat, laboriously, in the 1950 session of parliament; and the extent to which the government, in the resolution now under discussion, has adopted almost in their entirety the recommendations of the committee is I think the highest possible tribute which the government and the house could pay to the efforts of those who sat on that important committee.
I should like to associate myself entirely with the tribute paid by the Minister of National Health and Welfare (Mr. Martin) to the joint chairmen of the committee, Senator King and the hon. member for Montmagny-L'lslet (Mr. Lesage). I should like to say that all members in that committee showed
a most commendable spirit of co-operation. It is not very often that committees of parliament are able to leave aside partisan considerations when they address themselves to their tasks in committee or in the house; but I think to a most extraordinary degree all parties represented in that committee-that includes all parties in this house-did put aside partisan considerations as they addressed themselves to their task in that committee. Therefore I think it may be said that we have expedited the arrival of this occasion when security for our senior citizens is about to be translated into fact, and in addition that we have contributed greatly to devising the best possible scheme of security for our senior citizens.
My remarks today, sir, will be directed particularly toward those of the Minister of National Health and Welfare, because the Minister of Finance (Mr. Abbott) has in fact made something of a budget speech. It will not be expected of me, any more than it would be expected of the financial critic for the opposition, in following the Minister of Finance in a budget speech, to make detailed comments upon the budgetary proposals of the Minister of Finance. They will be considered in the light of the measure when it is available to hon. members, when its contents are known and when there has been sufficient opportunity to weigh the remarks of the Minister of Finance in relation to the various forms of tax which he considered, and the merits and demerits of the proposals which he has made to the house today.
Sir, the resolution has about it several principal features: in the first place, the abolition of the means test. That, sir, is unquestionably the leading feature of this bill. Universality of benefits would be impossible without the abolition of the means test. That means test has been under attack, almost unrelieved attack, for years. Its shortcomings have become manifest, more manifest as time has passed. I am sure that all hon. members will be glad of an opportunity of eliminating for all time the means test in connection with the payment of pensions to our citizens 70 years of age and over. When the other measure, the Old Age Assistance Act, providing for the payment of assistance to needy citizens between the ages 65 and 69 was under debate last June, some of us did naturally express our concern about the questionable logic of the abolition of the means test for those 70 years of age and over, and the retention of the means test as to those between the ages 65 and 69. In that case logic has to yield to the financial pressures, the necessity of keeping those expenditures within our

possible -capacity at the present time to pay; but there can be no question whatever that a sound step is being taken today in the abolition of the means test. The committee was absolutely unanimous in that recommendation with respect to those 70 years of age and over. The means test unquestionably has had, over a lengthy period, the effect of penalizing thrift. It has been the occasion of unwarrantable intrusions on the part of officials into the private affairs of citizens. It has penalized those who have either enjoyed, or have sought to establish, industrial pensions; and the extent to which industrial pensions have been increased in recent years, the whole scope of that -step forward in industrial relations, has created pressures on the means test which have become intolerable. And, sir, it was essential that payments as of grace, handouts, as they were often regarded, should be replaced by payments earned by the recipients and received by them as of right. That was a fundamental purpose of the highest importance in the recommendations of the committee which are receiving fulfilment today.
Let me set at rest at once any thought that the receipt of this pension of $40 a month by anyone is going to have the effect of discouraging people from contributing their labour to the general labour force of this country; far from it. The abolition of the means test will now assure that there will be no labour withheld at any time in our history when we need the maximum assistance from all capable of contributing anything to the labour force of this country. It will assure that any contribution that anyone can make will not be withheld because of the application of the means test. Witness after witness appearing before that committee emphasized the importance of providing inducements to people to go on, as long as their physical and mental capacities would permit, to make their contribution to the sum total of the productive capacity and effort of this country. The abolition of the means test itself is going to make a contribution of very great importance, it seems to me, not simply on the economic side, but also on the sociological side toward the achievement of that commendable goal.
Some of us had criticism to offer last June about that feature of the means test as to the assistance payable to those between 65 and 69. It is the application of the means test, Mr. Speaker; it is not the payment of assistance, which has had the effect of discouraging contribution to the productive capacity of the country on the part of recipients.
So much for the means test; there will, I know, be complete unanimity on that point.
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Now, sir, the next feature of the resolution is the sum involved, namely $40 a month. The committee again was unanimous in that recommendation. There were one or two organizations that recommended the sum of $30 a month. I am glad to say that the committee was unanimous in recommending $40. But in recommending the universal payment of $40 a month, Mr. Speaker, let us not overlook one or two hard facts. The first is this, that the upward march of prices in this country, even in the sixteen months since the committee wrote this report, has had the effect of reducing the $40 a month by a substantial amount. And if we think that we are being unduly generous let us just remember this, that when the payment of $20 a month was introduced a quarter of a century ago the $20 paid then had almost the equivalent purchasing power at that time that the $40 per month will have today. And if you apply that ugly cost of living index you will see that the $40 today is worth about $21, in terms of the purchasing power of the pension when it was first paid a quarter of a century ago.
There are today, in addition to the payments of $40 a month under a means test, benefits provided in the form of medical and dental assistance. Some of us on the committee were much concerned-and we showed our concern in the debate last June on the Old Age Assistance Act, when parliament was legislating for a flat payment of $40 a month which would replace the present joint dominion and provincial payments-that there might be a question as to the continuance of the provisions made for medical and dental care. I cannot speak for all the provinces, but I am most happy that in my own province of Ontario the provincial government has stepped into this field and has announced-in fact it has already implemented its announcement by legislation passed at the recent session of the legislature-that it will continue at its own expense to make medical and dental care available to all needy persons requiring it over 70 years of age, and in the group from 65 to 69 who receive the benefit of old age assistance under the means test. They too will receive the full benefit of medical and dental care. The scope of that medical and dental care is in the course of being enlarged. I know many of the provinces have their own financial difficulties; but in the interests of our senior citizens I do respectfully express the hope that it may be possible for all the provinces of Canada to make similar provision for needy elderly citizens.
The next feature of the resolution refers to persons of 70 years of age who have appropriate residence qualifications. I am sure I

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need offer no comment upon that portion of the resolution, because the Minister of National Health and Welfare has indicated that the recommendation of the committee in that regard is being implemented.
Next, the resolution contemplates the establishment of a fund made up of special contributions levied for that purpose. The universal feature of the present scheme deserves in that regard, I suggest, some special comment. It should not be thought that the committee did not give the most serious consideration to the alternatives offered to it. Those alternatives were, first, a program of old age assistance and, secondly, an insurance system. The third alternative was the one adopted, namely the universal pay-as-you-go system. The extensive review of the advantages and disadvantages of the other two alternatives in the committee's report indicates how exhaustively the committee did consider them before it arrived unanimously at the decision to recommend the universal pay-as-you-go system.
There are those outside the house who have expressed some regret that the orthodox contributory system on the insurance basis has not been introduced. They point to the system which has prevailed in the United Kingdom as probably the leading precedent. Undoubtedly great benefit is to be associated with the idea of bringing home to every individual the fact that the benefit he receives upon attaining the necessary age has cost money, that he has had to pay his share toward it, and has earned it as of right, Any weakening of that principle is something the committee viewed with some measure of apprehension. Nevertheless, in the final analysis, if I correctly understand the feelings of the committee as expressed in the course of our lengthy discussions, the factor which led the committee to reject the insurance system was that necessarily it would have been incomplete in its operation in our country, that it could not possibly have extended to even half of those to whom the universal system will extend, and that it would have become absolutely necessary to provide for others, no doubt in substantial numbers, by a continuation of the assistance program. That, in turn, would inevitably have involved the continuance of the means test.
The committee, in the face of this and other considerations, arrived-and I think soundly-at the decision to recommend the universal pay-as-you-go system. It has the advantage of simplicity from the administrative point of view. That, sir, is one of the features about the present proposal that I suggest is entitled to the highest measure of commendation. The system has not in it

any quirks or kinks that are going to involve difficulties in the course of administration. Nothing could be simpler from the administrative point of view than the system now proposed, and recommended last year by the committee. My personal view is that this is a factor which should be regarded as one of high importance.
The final feature of the resolution deserving of special comment at this time is the fact that the fund is to be made up of special contributions levied for that purpose. Nothing could be more sound than that a fund should be created for this purpose which should be divorced and detached from the consolidated revenue fund. It would have been deplorable if the Minister of Finance had not proposed the establishment of a separate fund for this .purpose, one detached from the consolidated revenue fund. For if payments for that purpose had simply been merged with all other receipts in the consolidated revenue fund, and payments out of it had simply come from that common fund, I think there would have been a loss of a sense of responsibility, and of the value that will inevitably be gained by the realization that these measures of social security, no matter how commendable, must be paid for.
Hon. members will perhaps envy the opportunity given the Minister of National Health and Welfare today, and perhaps find it in their hearts to feel sympathy for the Minister of Finance in the task allotted to him. It may be that the opportunities offered the two ministers today were not equal. Nevertheless I am sure all members of the house, in their responsibility, recognize with respect to this important measure of social security, as with respect to all other measures of social security, that they cost money, that there is no magic source of money, that they must be paid for, and that in the last analysis there is only one source of payment, and that is the pockets of the people.
On the matter of universality there is one feature that I think should have been worthy of treatment by the Minister of National Health and Welfare. I refer to those who do not need the $40 per month, those persons who are well-to-do. It may be that we have not heard the whole story of this from the Minister of Finance (Mr. Abbott), but I think the subject should have been dealt with today. I wish the Minister of National Health and Welfare had dealt with that point because it has provoked editorial and other comment in this country.
There are those who have said, Why have a universal pension to include those who do not need it? Unquestionably there are people

in this country 70 years of age and over who do not need this pension. After reviewing this particular aspect of the problem with great care the committee arrived at the conclusion that there should be no departure from the universal principle. To illustrate how much this point did bother some of the members, one senator asked at one stage why we should provide payments to those who did not need them. I recall about two years ago when the Prime Minister (Mr. St. Laurent) was asked in this house about the possibility of universal payments or payments with a greatly reduced or liberalized means test, he asked for himself why the country should pay him a pension in his circumstances when he had reached 70 years of age.
These are serious questions and I think the minister should have dealt with them in his speech this afternoon. I can give reasons why the committee recommended universal payments. First, it was felt that in the case of those who did not need the payments it would be a simple matter for the Minister of Finance if he so chose to draw them back in the way of taxes. In the second place, it was thought that the administrative problem would be considerable. It does not matter what figure you choose as the breaking point between those who will receive and those who will not; you are applying a means test. It may be that it would be an infinitely more generous means test than that which had prevailed hitherto, but nevertheless it would involve the application of such a test. That in turn would have brought with it almost all the objectionable features of the present administration of the means test. It would mean that you would be penalizing thrift in many cases while making payments in other cases to those who had not generally practised equal thrift. It would have meant more intrusions on the part of officials into the affairs of individuals. For these and other very good reasons, not least of all being the administrative difficulty of enforcing such a test as compared with the administrative ease with which money could be taken back in taxes from those who did not need it, the committee arrived, I think soundly, at the conclusion that the simplest and most effective system was the universal system.
I think I have said all I need to say about the importance of a separate fund. I should like to stress the importance of earmarking contributions by placing them in a special fund created for the purpose. That is the sound principle which some of us asked should be recognized long before this with respect to such measures of social security as have been implemented by this parliament in years gone by. It is a principle that is inherently
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sound. We should know the precise cost of all these measures of social security because in the last analysis the people must be the judges of whether they are receiving value in respect of the expenditures made. You cannot expect the people to exercise the right that is their due of making clear-cut decisions on these matters unless you adhere to the principle of earmarking funds and putting them in a special account for this purpose.
The pay-as-you-go feature is sound. One of the advantages of the universal system is that it does not involve adherence to the insurance principle. Had we inaugurated a system involving the insurance principle it would have been necessary to make provision for the accrued liability of persons who would be entering upon such a system at an age approaching retirement when they would not have before them the span of years that would permit them to make sufficient contributions into such an insurance fund to earn the benefits to which they would be entitled from the fund. Some countries that have applied the insurance principle have been faced with this problem and have gone out of their way to establish large funds for the purpose. We were told that in Switzerland the fund in some respects approaches the size of the national debt. One of the advantages of the system recommended by the committee and about to be implemented is that it is possible to establish and adhere to a pay-as-you-go principle. That is a principle of unquestioned soundness.
Things have been said by some of those who have spoken on this subject that will occasion questions to the minister. For instance, the minister gave the house assurance this afternoon that there would be no infringement by reason of the payment of $40 per month upon the benefits now paid under the War Veterans Allowance Act. I think the house will want further information in regard to that point. We have not forgotten that when the Old Age Assistance Act was before the house last June we were told that the effect of section 3 (2) (b) was that benefits received under the War Veterans Allowance Act would be counted as income in the case of persons between the ages of 65 and 69 years and in that way pro tanto would reduce the benefit that a veteran might receive under the Old Age Assistance Act. We want a clearer statement from the minister with respect to the present measure.
We know quite well that the benefits received under the War Veterans Allowance Act will not be counted with respect to this universal payment of $40 per month, but we want a converse assurance that the receipt by any person 70 years of age and over of
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$40 per month under the measure now being introduced will not disqualify him from receiving benefits under the War Veterans Allowance Act. In particular we will want assurance that no benefits received under such features as the recently-inaugurated unemployability supplement or other measures that are to be introduced shortly to amend this act, according to the announcement made last Friday by the Minister of Veterans Affairs (Mr. Lapointe), will be made the occasion for denial to war veterans because they may be qualifying for the $40 per month under the present measure.
I am sure hon. members listened with interest to what the Minister of National Health and Welfare (Mr. Martin) had to say this afternoon with reference to the enlargement of the annuities available under the annuities act. The annuities act came under review by the committee on old age security to some extent, and while we will naturally wish to see in detail the amendments proposed by the government and, we are told, soon to be introduced by the Minister of Labour (Mr. Gregg), and while we shall wish more information with regard to them, I think all members of the house will have recognized long before this that the maximum annuity available under the present act has been greatly reduced in purchasing power and value by reason of the mounting level of prices, and that some measure is needed by way of amendment to the act to cope with that reduction.
The minister had something to say this afternoon concerning the progress made with registration on the part of applicants for the $40 per month to be paid as from January 1. I am sure all hon. members are glad to hear that as many as 277,000 applications have been received from those who are not already in receipt of assistance under the dominion-provincial scheme now in effect. Hon. members will have noted, I am sure, that the minister did not give the exact figure of those who have been successful thus far compared with the number that may be held in abeyance for further proof. If we analyse the figures he did give us we will have concluded that of the 277,000 applications received only about one-half have thus far been approved.
The minister says that approximately 15,000 to 20,000 weekly are being approved. I think all hon. members will want to see approval granted as quickly as possible in order to relieve the uncertainty that has been created for many applicants not simply by reason of the proofs required in their own cases but by the knowledge that has gone abroad of the extent to which rigid requirements of proof

are being applied and enforced. I bring to the minister's attention once more, as I sought to do yesterday, the necessity for a much more reasonable, sympathetic and understanding approach to the problem that many applicants are facing today in seeking to meet the very high standards of proof of age that are being required of them by the Department of National Health and Welfare. I ask the minister in all seriousness if it is fair and reasonable to expect members of the same family in widely scattered parts-


Paul Joseph James Martin: May I answer that right now? I was not in the house when my hon. friend brought up that question. He spoke about one bible being required to be sent in four different times. I should like to have that case. I have checked on it and I can find no instance of it. In no circumstances would we expect applicants who are covered by the same bible to send it in more than once.


Donald Methuen Fleming: I hope the minister will communicate that information to his local offices-


Paul Joseph James Martin: May I have the name of that case?


Donald Methuen Fleming: Yes-and will instruct his
officers in such cases to take note, on behalf of applicants in other regions, of the proof submitted in the particular case on behalf of one member of that family.


Paul Joseph James Martin: Instructions like that were given two months ago.


Donald Methuen Fleming: Then I think it is time a reminder of such instructions should be sent to officials. I put to the minister again the utter unreasonableness of denying both notarial and photostatic proof in the case of records that are not readily available. I ask the minister to re-examine this whole matter without delay, because there is no little consternation felt on the part of many applicants who are confronted with problems, in the light of the present rigid requirements which they find themselves unable to meet.
The minister and I belong to about the same vintage. We have not had the experience that many persons a generation older than ourselves have had of finding that their parents seventy years ago and more did not take the trouble that parents are compelled to take today to register the births of their children. The system or registration then was in its infancy, and it was more often honoured in neglect than in observance. Then, to a degree not commonly recognized, other sources of proof of age such as church records have been destroyed in large numbers by fires. Fires occurred in country churches in those days much more often than they do now. Records are lacking today in many cases

where their absence is attributable to no other fact than that they have been destroyed by fire or other causes entirely beyond the control of those who are applying for the benefit of the pension payable on January 1.
I ask the minister in all earnestness to re-examine this whole matter of proof in a sympathetic and understanding way, because I feel in all seriousness that he has not fully appreciated the extent of the consternation that has been created in many applicants by what they have encountered in the way of demands for further proof.
I should like to close on the note with which I opened today. It is a pleasure to welcome a measure which will, I know, command in its goal and its objective the unanimous adherence and support of the house. It is a happy thing, sir, that in the attainment of this high national goal all political parties in the house are as one, and all of them claim, and properly so, their share of the credit for achieving this goal today. While in due course we will have to come to the other side of the picture, the picture placed before us this afternoon in perhaps more sombre tones by the Minister of Finance, and deal on their merits with the inescapable questions he has raised, I am sure that all of us are happy to endorse the goal set forth in the resolution now under debate.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, no one is more conscious than are we of this group of the historic significance of this day, when we are taking the first step to place upon the statute books of Canada an old age pension law which will be free of the means test. One thinks of those who have worked in bygone years in the hope that this day might come. Indeed I feel I should go no further without mentioning the name of one former member of this house, the late J. S. Woodsworth, who played such a prominent part in getting the first old age pension legislation upon our statute books. Not only did he play a part in the initial stages; he continued to advocate and work for more adequate measures of old age security, including the abolition of the means test and an over-all program of social security for all Canadians. I believe members of all parties will agree with me that when we are taking this forward step we should remind ourselves of the efforts made, not only by those of us who are here now and have had a part in these current activities, but by those who were here in years gone by.
I realize too, Mr. Speaker, that the popular thing to do on this occasion is to spend some time saying what a good job parliament is
94699-26 J
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doing, to spend some time praising the measure that is being forecast by the resolution before us. It is a praiseworthy piece of legislation, particularly in that it removes the means test from the old age pension as at age seventy. But perhaps it can be taken without my saying it at length, from one who has had a good deal to say across the years urging that this step be taken, that I for one and the members of the group with which I am associated are indeed pleased to be here on this occasion when we are abolishing the means test as at age seventy. Nevertheless, Mr. Speaker, I feel that it is our duty, despite the charge that will be made by some hon. members opposite that we are forever finding something wrong even with what is good, to point out the shortcomings of the legislation that is being presented.
There are two main faults that I find with the bill that will be introduced when this resolution is passed. There are other points than those two with which I might deal and to which I may refer in passing, but they relate more to the Old Age Assistance Act which we passed last June. However, what we have before us now is legislation to provide for old age security from age seventy onward. The first thing to say with regard to the inadequacies of this measure is that the $40 a month provided by the legislation is insufficient, particularly in the light of today's prices and in the light of what we in Canada regard as a decent standard of living. Much was made by the Minister of National Health and Welfare (Mr. Martin) about the unanimity of last year's parliamentary committee in presenting its report. He had every right to refer as he did to that unanimity. There were some of us on that committee who were not satisfied that the report went far enough, but all of us agreed that in so far as it went we welcomed its provisions, so we gave it our unanimous support.
May I point out, however, that in addition to the unhappiness many members of the committee felt then over the fact that there was no proposal to increase the amount of the pension, since that time there has been a drastic and serious rise in the cost of living which has reduced still further the value of the $40 old age pension. In another debate the other day I referred to the loss in value of $40 that has taken place since that committee made its report in June, 1950. Another comparison that might be made, indeed one that I feel should be made, is between the value of $40 today and the value of $40 in April, 1949. The reason I picked that date is that it was in the month of April, 1949,

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just before the 1949 election, that the old age pension was increased to $40 per month. Surely, Mr. Speaker, our old people, both those already on the pension and those about to go on the new pension, have a right to expect that the purchasing power provided for them in April, 1949, will be maintained. The fact of the matter is that whereas the cost of living index in April, 1949, stood at 159-3 it is now 189-8. That means that $40, in terms of 1949 dollar values, is now worth only $33. If you look at it in terms of the food index-I mention that because a large proportion of what our old age pensioners have to purchase is food-you find that $40, in terms of the April, 1949, dollar value, is only worth $31.62. It does seem to me that our older people had every right to expect we would keep the value of the pension up to what it was in the month of April 1949.
As a matter of fact, before the minister and other members from the government side indulge in too much boasting about this measure, I believe we should compare what we are now doing with what was done when the pension was first inaugurated at the lowly figure of $20 per month. The government boasts that the amount has been doubled, from $20 to $40 per month. But if you look at $40 pension today in terms of 1935-39 values the result, in terms of the general cost of living index, is that $40 today is worth only $21.07. If you look at it in terms of the food index the $40 today is worth only $15.92 in 1935-39 purchasing power. So I submit, Mr. Speaker, that the temptation to boast is one the Liberals should not yield to so readily. The government is not doing anything very wonderful for our old age pensioners in providing only $40 per month, particularly in view of the way the cost of living has been allowed to go up.
I want to say quite candidly and quite seriously, not in the sense of trying to make a debating point or anything else but just a plain, ordinary humanitarian appeal, that I feel the government should have increased the figure that was included in the parliamentary committee's report of last year to not less than $50 per month. I pick that figure on the basis of the comparisons I have just given as to the shrunken value of $40 since April, 1949. Personally I would go further and say that, in the light of today's productive capacity and today's standard of living, in the light of today's overstocked inventories about which we have heard so much during this session, we should be paying our old people not less than $60 per month. I, for one, am indeed sorry the government did not, on its own initiative and on the basis of

this humanitarianism of which it boasts, increase the amount of the pension before bringing in this legislation.
My mind goes back to something which happened in this house in 1947, when there was a resolution preceding a bill to amend the Old Age Pensions Act. When we received the bill the proposed increase was to $30 a month; but on that occasion the minister had not put that figure in the resolution preceding the bill, thus leaving us in the position of feeling, from the rules of this house, that we had the right to make an amendment to increase the amount of that pension. We did so on a day and in a debate which I am sure the Minister of National Health and Welfare well remembers. I notice that this time he took the precaution to write the $40 into the resolution preceding the bill, to make sure that we would not have the opportunity to move an amendment when the bill comes before us.


Paul Joseph James Martin: I agreed to $40 because, among others, the hon. member had recommended that amount.


Stanley Howard Knowles: Has the minister completely ignored the remarks I have made in the last ten minutes as to what has happened to the cost of living since the committee made that report in June of 1950, to say nothing of what has happened to the cost of living since the $40 figure was arrived at on the basis of the bill brought in by the minister in April, 1949? Because of these changes in the cost of living, I submit that the government should have acted accordingly and should have increased that figure of $40 to at least $50, in order to compensate for the rise in the cost of living. I make that plea on behalf of old people generally. I make it on behalf of a really proper and adequate old age security system which we are trying to get established in this country. But I make it in particular on behalf of the more than 200,000 old age pensioners who will not get any increase in the amount of their pensions as a result of this legislation. There are many-more than 200,000-who are already drawing the full $40 a month. For them there is no increase whatsoever. I am one of those so thoroughly opposed to the means test that I do not suggest there should be any means test supplemental allowance for those people. They need a higher amount, as of right, and so I feel that there should be an increase across the board and that, correspondingly, there should be the kind of taxation proposals to take care of those who, as a result of the increase, would be getting pensions they do not need. But I insist, Mr. Speaker, that this parliament in this special fall session is not doing its duty by the old people of this

country if we go home satisfied to have given our old age pensioners only $40 a month. The amount of $50 or $60 a month is just as necessary now for our old people as $40 was in 1949, on the eve of the election. It is a matter of regret, perhaps, that there is no election coming now. We might have obtained an increase in that amount if there were. I hope the minister is not just saving it for the eve of another election, for the problem is serious for those 200,000 who will get no increase, as well as for many others who will come on the pension for the first time and who, in many cases, need it just as much as do the 200,000 already drawing the full amount.
In that connection may I point out that there are many people who will start to draw the pension for the first time when the means test comes off and who have needed it right along, but who did not like to go through the red tape, or did not like the feeling of charity that was attached to it, or did not like the provision made for recovery from their estates and so on. I am glad the means test is off for that particular group. As a matter of principle, I am glad it is off across the board. But in the name of these 200,000 people for whom there is no increase, I submit that there should be an increase in the amount of the pension to either the figures that I have suggested, that is, $50 or $60 a month.
While speaking of a matter of that kind, Mr. Speaker, I think I should say, even though it is a bit of a digression, that another matter to which we must give serious attention is this whole problem of health services and health insurance; and it comes to mind particularly because of the needs of our old people with respect to health. This would be a good place to start a national program, only I would hope that we would not stop there. For all the pride and pleasure that we have in the step we are taking today, I urge that we realize that our job is not done until we have placed upon the statute books of Canada a really adequate program of over-all social security, including the various measures we now have as well as proper and generous provisions for the care of our people's health, with provision for financing it through a proper health insurance plan.
While I am referring to these things and making the point that there should not be too much boasting but rather some searching inquiry into the whole situation, may I say that I was disappointed to hear the Minister of National Health and Welfare today make the boast-and with it the implication that that was the whole story-that the federal government had never required
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the filing of liens on the property of old age pensioners, even under the legislation we have had on the statute books for the last quarter of a century. Mr. Speaker, that is another statement which is true as far as it goes, but it does not tell the whole story. Certainly the federal government has never required the filing of liens. The federal government could not do that. The British North America Act, with its section on property and civil rights, leaves that matter to the provinces. But the federal government has required the provinces to make recoveries to pay back pensions that have been paid, and has required that, where those recoveries are made, a certain percentage be paid back to the federal government. Up until about 1943 that requirement was across the board. In 1943 or 1944, I think it was, Mr. Ilsley wrote a letter to the provinces indicating that so far as the federal government was concerned it was optional with the provinces as to what they did with regard to estates of the value of $2,000 and under; but it is still required by the federal government that recoveries be made in the case of estates of $2,000 or more. Just to say that the federal government has not required the filing of liens is not telling the whole story. It is federal legislation that has required recoveries. Perhaps I had better not spend too long in dealing with these boasts made by the minister, but I felt that the whole story should be told in respect of all aspects of a matter such as that.
Generally speaking, as I have already said, the proposal before us today is one that we heartily welcome, particularly in that it removes the means test as at age seventy. As I have already indicated, however, there are two shortcomings. With one of them I have already dealt, namely, the inadequacy of the $40. The other serious fault I find with the proposal laid before us today is in part of what the Minister of Finance (Mr. Abbott) had to say. I noted that the hon. member for Eglinton (Mr. Fleming) preferred to leave that section of it until a later time; but from what the Minister of Finance said today it seemed to me that there is at least one aspect of his taxation proposal which certainly ought to be changed. I refer in particular to his statement that this 2 per cent personal income tax is to have a ceiling of $60 a year. That means that anyone who has taxable income-and I emphasize the words "taxable income"; that is, income over and above his personal and family exemptions-of more than $3,000 a year, will pay no old age security tax on the portion of his income that is above that $3,000. I regard that situation as grossly unfair. It means that the bulk of the burden of financing the old age security plan will be met through the

Old Age Security
sales tax on everybody, including those who cannot afford to pay it, and through the income tax on the middle income group, those in the brackets where they have taxable income of between $2,000 and $3,000 a year. Surely every member of this house has been faced with questions about the removal of the means test. One of those questions has been: What about the millionaires? And I am sure every member in this house has said: Do not worry about the millionaires; they will pay it back in their taxes. I have said that. I felt sure that would be the plan. As a' matter of fact, this morning I saw a copy of the Financial Post a bit ahead of time; it is dated October 27, and today is only October 25. On pages 1 and 3 of that issue there is a story of the tax it was expected the Minister of Finance would propose to finance this new old age pension program. The Financial Post seems to have a pretty good pipe line, but it missed the boat on one or two features. The Financial Post expected that there would be these three taxes, two, two and two. They were correct in that. But then they thought that the 2 per cent increase in personal income tax would be without any change in the exemption levels or without any other exceptions. The Minister of Finance comes along today and tells us that the principle of excluding upper income has been included in this plan, with the result, as I say, that people who have over $3,000 of taxable income will not pay any old age security tax on that portion of their income above $3,000 a year. I think that is socially and economically wrong. I think it is completely indefensible, and for my part it will have to be fought as hard as we can fight it when we get to that part of the bill.
Last spring when an additional tax for national defence was brought in, the Minister of Finance made it a 20 per cent surtax. The effect was that the money that had to be found for national defence was to be obtained on something of a sliding scale. Those paying the higher rates of tax were subject to a higher rate of increase, because it was a 20 per cent surtax on the tax being paid, and there was no exclusion of those in the upper brackets. It went right up to the top. In fact I well recall the hon. member for Coast-Capilano (Mr. Sinclair) emphasizing that point when we felt that it did not go far enough. His point was that it was a steeply graduated tax; in other words, that is the way the Minister of Finance felt he had to raise additional money for purposes of national defence. But now, when we come to raising this old age security money, not only does he get away from the principle of a surtax that graduates upwards into the upper brackets, not only

does he make it just a 2 per cent flat increase, or a 2 per cent addition, but he says, if you pay $60 a year into this you do not have to pay any more, even if you are a millionaire.
The Minister of Finance had a good deal to say about the sales tax. He said that it would be the place where people would pay, and where they should pay, and it would be the place where the wealthy would pay their share. I tried to do a little figuring on that since the minister announced the proposal, and it looks to me like this. The millionaire will pay only $60 a year in direct old age security tax; and if he is over seventy and drawing a pension he will get $480, paying only $60 of it back into the old age security fund. That hardly seems fair. But, says the minister, he will pay a lot more, if he is a millionaire, into the fund on the basis of the 2 per cent sales tax. Well, he will have to spend $21,000 on goods subject to the sales tax before he pays into the old age security fund that other $420. So, Mr. Speaker, I do not think-


Douglas Charles Abbott: He will be paying his surtax, and all the rest of it. That is completely fallacious.


Stanley Howard Knowles: So will all the others. The Minister of Finance is trying to isolate for the little people what they are paying for their old age security. Does he not have to apply the same thing to the millionaire and isolate what he is paying? All he would be paying is a limit of $60 so far as the direct old age security tax is concerned, and a portion of the sales tax that he pays on the things he purchases. And as I have said, he will have to spend $21,000 at 2 per cent in order to pay that other $420 into the special fund.


Donald Methuen Fleming: Maybe he will lose the special $500 exemption which he receives at age 65.


Stanley Howard Knowles: The hon. member for Eglinton says: "Maybe he will lose the special exemption which he receives at 65.


Douglas Charles Abbott: Completely fallacious.


Stanley Howard Knowles: 
Mr. Mutch:: Who gave the lecture?


Stanley Howard Knowles: I quote:
Those are both two perfectly understandable, perfectly justifiable views as to the function and purpose of social security in our democratic society. But I like to think of our social security programs in a slightly different light. I like to think of them not merely as the badge of our compassion, nor as a necessary cost of doing business, but as the purposeful symbol of our democratic way of life itself, a recognition of our common brotherhood, our common interdependence.
Then comes the quotation from Franklin D. Roosevelt, as taken from his first inaugural address as governor of New York in January, 1929, when Mr. Roosevelt was discussing the relationship between the individual and the community. This is what he said:
It is the recognition that our civilization cannot endure unless we, as individuals, realize our personal responsibility to and dependence on the rest of the world. For it is literally true that the "selfsupporting" man or woman has become as extinct as the man of the stone age. Without the help of thousands of others, any one of us would die, naked and starved. Consider the bread upon our table, the clothes upon our backs, the luxuries that make life
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pleasant; how many men worked in sunlit fields, in dark mines, in the fierce heat of molten metal, and among the looms and wheels of countless factories in order to create them for our use and enjoyment.''
That is the kind of society we live in. It is no longer a case of each man being able to fend for himself and to save up for his own old age. Surely this inflationary period has proven that. There has been talk today about annuities. Look what has happened to people who bought government annuities years ago; inflation came along. We do not save when we are working the goods and services we live on when we retire. No; what happens is that during the years we are working part of what we produce provides social security in those years for those already retired. And, in return for that, when our day to retire comes along, the society of that day sets aside part of what it will produce for our retirement.
Therefore I think we should keep away from these notions of a direct relationship between what we put in and what we get out. It is not a case of how much we put in either through a direct contributory scheme, through private insurance, through a government annuity, or through a tax for old age security. It is not a case of adding that up and saying, "How many dollars am I going to get back when I am seventy?" If you had to analyse it on that basis, it would never seem satisfactory or fair.
The reality of the situation is that in this year we work in our economy and in our society to produce a total volume of goods and services, and we arrange that a portion of those goods and services be set aside for these other purposes. We do it with the feeling and the confidence that society moves on, and that when our day to retire comes along we will be treated in the same way by those who are working at that time. And if, when that day comes, we have helped to build up a productive capacity which is greater, our retirement should be even better than we are able to provide at this time.
In that connection, one of the things I do not like about the way the Minister of Finance (Mr. Abbott) wants to isolate this fund and to review it every year is that it seems to me he has given in to the propaganda of some of these manufacturers' organizations, tax foundations and the like, who wish to have this matter set up in a way that will put the brake on demands for increasing the amount of the pension. Family allowances are not put aside in a separate fund, with the taxes paying for them earmarked for that purpose. We do not treat defence expenditures in that way. Why is old age security picked out for special treatment? It looks to me as if there is this desire

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to put it in such a way that it will be difficult for society to say, "We want a reasonable increase in the amount of old age pensions".
That is the reason I have taken time to analyse the system, as I did a moment ago. It seems to me we should think of this, not in terms of fiscal burden, as the Minister of Finance has said, but rather in terms of an interdependent society. What counts is what we are able to do each year. If we are able this year to produce enough to provide a better retirement for our people, then let us do it by all means and not be hamstrung by having to review the matter in an isolated fashion as is proposed by the Minister of Finance. It seems to me we have gone a long way in the right direction in the plan now before us; in its universality, in the removal of the means test, and to the extent that there is no relationship between what the individual pays in and what he gets out. That is all to the good. Let us not spoil it by putting it in such a way that any attempt to have the amount of the pension increased will be forestalled.
Certainly the pension will have to be increased. Do not let the government, or any government which may succeed it, think it will get away with $40-or $50 or $60-for years and generations to come. Surely as society goes on and our productive capacity increases, surely as our standard of living improves, future generations will do better for their older people than we are doing for them now. Let us see to it that that principle of solidarity in our society, and our interdependence, is woven into the fabric of this old age security system.
In that connection I noticed the Minister of Finance enjoyed the little bit of so-called economic logic he handed out when he said that he had never found any way to get a dollar to pay to one person without taking it from another. And that is supposed to be the answer to these appeals to increase the amount of the pension, or to extend our social services. I hope he has not overlooked what was said by the Minister of National Health and Welfare, namely that what we pay comes out of current production, and that if we want larger pensions and broader social security the thing for us to do is to increase our production and see to it that the increase is used for socially desirable purposes. So long as you do it by a taxation method which puts a limit of $60 a year on the millionaire, you are not carrying out the principle of passing on and sharing the full benefit of increased production.
There are two or three other things I wish to say, if time permits. I feel that although it perhaps applies to the other bill passed

last spring, parliament will soon have to review the whole question of the means test at sixty-five. I was interested in the plan announced by the Minister of National Health and Welfare today with respect to annuities, namely that it will be possible to integrate government annuities with old age pension legislation. But bearing in mind the shrinking value of money, bearing in mind this interdependence I have been talking about, I think the day will come when we will have to take still more community responsibility, still more social responsibility, for the retirement needs of our people.
Incidentally I could not help noticing the contrast between what the government has been able to do in relation to annuities, and what it has been able to do with respect to war veterans allowances. At the last session of parliament the government was asked repeatedly from this side of the house to be ready at this fall session with the necessary amendments to the War Veterans Allowance Act, to make sure the veterans on that allowance would not be the only group who would not have any improvement in their position. The Minister of Veterans Affairs I thought took the point seriously, and I was hoping something would be done by the time the house met this fall. However they have shown, on the other side, that they have had time to think out a plan whereby old age pensions can be integrated with the government annuity, but they have not had time to think out a plan to integrate old age pensions with war veterans allowances.
That is highly regrettable. I say if there was time for one, then there certainly should have been time for the other. It is quite clear-and I was glad to hear the minister say it today-that every person of seventy years and over, with the proper residence qualifications, should apply for old age pension. There is no means test in it. In other words the fact that you are drawing a burnt-out pension does not deny you the right to draw the full old age pension, if you meet the age and residence requirements.
But the fact of the matter is that the means test is still in the War Veterans Allowance Act, and once the burnt-out pensioner starts drawing the old age pension and in January or February of next year begins receiving the actual cash, according to the law as it now stands such amounts will be treated by the war veterans allowance board as income, and such a war veteran's allowance would be reduced accordingly. In some cases, if that happens, the entire advantage of the old age pension will be wiped out. In some cases the veteran will be left with an advantage of about $10, and his treatment and hospitalization rights.

That is not good enough. It really is a retention of the means test, so far as one group of our people over seventy is concerned.
I urge strongly that this question of the relationship between old age pensions and war veterans allowances be dealt with at this session of parliament. It is not good enough to tell us that there will be a committee next year. These people need some improvement in their position now, not next year. I think the Canadian people generally will feel annoyed when they realize that almost every other group of Canadians seventy years of age and over will benefit by this legislation except those receiving war veterans allowances. In that case the benefit will be either nothing at all or very little.
There is one other group to which I should like to refer, and I do this because it illustrates the type of problem that will have to be dealt with. I hope the government will give attention to this matter. I had hoped the Minister of Transport (Mr. Chevrier) might be here, but perhaps it will be drawn to his attention. I have before me a copy of the rules and regulations governing the Canadian National Railways pension fund. Under this fund there is paid what is known as a basic pension of $25 per month to every employee of the Canadian National on retirement at a certain age for certain years of service. Section 9 of the rules and regulations reads:
9. This pension fund shall not apply to any employee who is eligible for or in receipt of any pension or superannuation allowance under any other pension fund or plan now or hereafter in effect where such pension or allowance is contributed to wholly or in part by the company or the government of Canada, except war pensions.
If no change is made in those regulations it will mean that every Canadian National Railways pensioner over seventy years of age will find that he will lose the $25 per month he is now getting when he starts to draw the old age security benefit of $40 per month. When we have referred to the plight of the Canadian National pensioners in this house from time to time it has been difficult to get much satisfaction. It has been suggested that their problem would at least be alleviated by the introduction of this new old age pension plan. I take the government at its word that that is the intention, but it is pretty clear from the section I have read from the Canadian National pension rules that unless a change is made these men will suffer a loss.
My fear is that there are other cases in addition to the burnt-out pensioners and the Canadian National pensioners. The whole problem should be gone into most thoroughly by the government, and now rather than waiting until next session. The government
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has found time to work out a scheme to integrate annuities with the old age pension legislation and they should be able to find time while we are here to integrate all these other plans.
I said earlier that we in this group welcome most heartily this significant piece of legislation because it represents the taking of a step we have advocated across the years. It removes the means test, although not entirely so far as our old people are concerned. However, it does remove it for those seventy years of age and over, and that is a step which we support wholeheartedly. I regret that the legislation now before us does not provide for more than $40 per month, and I regret that the Minister of Finance has not devised a fairer method of dealing with what he calls the financial burden.
I have been quite specific in my complaint on that score. Whereas the general income tax legislation is on a sliding scale graduated upwards; whereas national defence is being paid for by a surtax which is a percentage on a percentage and therefore is graduated upwards, when it comes to old age security the minister proposes a straight 2 per cent tax with a limit of $60 on the wealthiest people in Canada. I believe it would have been better for him to have imposed a surtax at whatever percentage was necessary so that it would be a small tax for those in the lower brackets and then go on up. If he did not want to do it by a surtax he could have done it by imposing a one per cent tax on those just above the exemption levels and a 3 or 4 per cent tax, or more on those in the higher income brackets.
I am sorry there are these flaws in the legislation. I hope they will be corrected and that as time goes on we will make other improvements in our social security legislation until we reach the day when we have a really adequate, over-all plan, based on the right of our people to these things because of the wealth they produce, and providing protection for our people against all the exigencies of life.


Mr. F. D. Shaw (Red Deer):: Mr. Speaker, parliamentary records disclose that since Social Credit members first entered this house almost sixteen years ago they have taken advantage of every opportunity to express their views relative to the treatment Canada has extended to her senior citizens. We have never hesitated to make specific recommendations on their behalf. Moreover we have never hesitated to support measures designed to improve their lot. Of course we have at all times reserved the right to criticize whatever the government might bring down even



PROVINCIAL LIBRARY. VICTORIA, B. C. HOUSE OF COMMONS

[Stage Direction]
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though such measures might have a certain amount of good. Upon this occasion we are satisfied that we are taking an important step forward even though in trying to achieve a certain goal the government may be employing methods we cannot wholeheartedly support.
In his earlier remarks the hon. member for Eglinton (Mr. Fleming) paid tribute to the joint chairmen of the old age security committee of 1950. Upon a previous occasion I also paid tribute to those chairmen. I said that this was certainly one occasion on which members of a committee had good reason to feel that nothing was being imposed upon them or, as we sometimes say, that the chairman was not endeavouring to force something down our throats. We felt it was due, in part at least, to the skill and ability of the joint chairmen that the committee was able to accomplish as much as it did during the short period it sat.
The hon. member for Eglinton also paid tribute to certain departmental officials who were so generous with their time and who assisted so greatly in enabling us to accomplish our work. I feel that their assistance enabled us to be more efficient. Their assistance certainly contributed to the speed with which the committee was able to reach certain conclusions. I think also their assistance enabled us to reach a degree of unanimity which could not have prevailed without that help. I considered the committee to be free from political pressures, even though its personnel was determined on the basis of party representation in the House of Commons. I recall telling one of the joint chairmen on one occasion that I had reason to believe he was having more trouble with his own members than he was with the opposition members.
May I refer first to the abolition of the means test in connection with this universal old age pension. We have always taken issue with the means test. I am compelled to believe that we in turn have been forced into that position over the years because of two very important factors. In the first place there was never uniformity of administration. Even within a province we found that pensioners were not being treated, and probably could not be, in a fair and equitable manner as far as the means test was concerned. Because of that we found a great deal of dissatisfaction among pensioners. Of course that dissatisfaction was communicated to us, and it certainly was a motivating factor when it came to the position we have taken in the House of Commons with respect to the means test.

In the second place, down through the years we have always clamped a pretty severe test upon old age pensioners in that there was such an extremely low allowable income. Under the old act the allowable income of $120 a year caused a great deal of dissatisfaction. It has been said that it created a certain amount of dishonesty among the people. It certainly did not encourage many of them to go out and do the work they were capable of doing, even though we kept admitting that it was better for the country if they would work if they could, and certainly if physically able it was better for them mentally if they were able to carry on. Therefore conceivably the government itself contributed immeasurably toward the dissatisfaction which arose because, as I say, of the very low ceiling which was imposed upon our people.
So far as the amount of $40 per month is concerned, I am perfectly willing to admit that the committee agreed that $40 a month should be recommended as the payment to old age pensioners, but there are two or three things which I think should be borne in mind at this time. First, I am absolutely convinced that the government would not have accepted the recommendation if it had suggested a payment of more than $40 a month. I might add that some of us, who felt that $40 was inadequate, agreed to support it because of what I have just said, namely, that I doubt whether the government would have accepted the recommendation if the figure had been higher.
In the second place, there is a vast difference between the cost of living in June, 1950, and today. Even those who agreed that probably $40 as a basic pension was adequate have been obliged to change their views today because of the inflationary condition which has developed during the intervening months and years. I thought the pension of $40 was capably dealt with by the hon. member for Winnipeg North Centre (Mr. Knowles). He actually attached it to the cost of certain essential commodities such as foodstuffs. It does not require any stretch of the imagination whatsoever to realize that $40 a month is hopelessly inadequate so far as our senior citizens are concerned. The value of $40 varies, naturally, depending upon where the pension recipient may live. In the larger urban areas rents are very much higher. A pensioner would be far worse off in such an area than if living in a little home on a corner of his son's farm in some rural community. It is hard to say that $40 per month is equal to a certain figure of so many years ago unless we tie it to a specific area, but it is a fact that on the broad general principle

of applying it to the cost of living today compared with the cost of living ten years ago we find that financially the pensioner is not any better off than he was ten years ago when he was drawing $20 per month as the basic pension.
I should like to refer for a moment to the question of the numbers who have applied for payment of the universal pension as of January 1. Early in the summer, when we were suddenly bombarded by announcements over the radio several times a day and by the many advertisements which appeared in the newspapers, I wondered just what the government had in mind. As a matter of fact I suppose the minister would say: We wanted to get all the applications in so we could get them cleared away in order that payment might commence in January. However, one very important impression conveyed to the people was that this thing is compulsory. People everywhere were expressing the view that universal old age pensions were a compulsory piece of legislation, and that they had to apply.
I have had many letters within the last few days. Some are from war veterans allowance recipients who are still under the impression, by virtue of the nature of that advertising, that they are obliged to apply. I dare say thousands of people, who would not otherwise have applied for the universal old age pension, have done so because of the nature of the advertising-some called it propaganda-that was carried on in connection with this matter. The sum of $50,000 for that type of advertising may not be a very large amount, but I often wonder how many thousands of dollars are going to be paid out as a result of that advertising which would not have to be paid out if people had not been given the impression that it was compulsory; or is there something else behind this?
I well recall that when family allowances were paid one could elect to accept or refuse them. So far as income tax was concerned, a person was no worse off as a result of his refusing. Before long, however, the act was amended so that certain deductions were allowed if you had no children of family allowance age. Certain other deductions were allowed if you had children of family allowance age, with the result that if a person did not accept he was far worse off than if he had accepted for his children of family allowance age. I am wondering if behind all this may be the idea that before too long it will be put on the compulsory basis in the sense that tax adjustments will be made in such a
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way as to force a man to accept the pension or leave him in a worse position financially than would otherwise be the case.
I certainly feel that the matter of the universal old age pension, so far as recipients of war veterans allowance are concerned, should be cleared up without delay. I have had a great many letters from recipients of war veterans allowance, as I am sure other members have. We are still not in a position to be certain of what advice we should give them. The reason is that the government have managed to keep their intentions pretty much in the dark in this respect, and I think that matter should be cleared up quickly.
I should like to suggest to the Minister of National Health and Welfare (Mr. Martin) that with respect to the question of proof of age it is a fact that for those persons who cannot produce birth or baptismal certificates it has been made more difficult foy them to prove age today than was the case under the old act. The minister shakes his head, but let me remind him that on their own form they say either the birth certificate or baptismal certificate, or any two of the following. I look down that list, and I find that the provincial authorities were accepting any number of those things, and pensions were being paid on that basis.
Paul Joseph James Martin: It is much easier now.


Frederick Davis Shaw: It is easy to make an assertion of that kind, but on the basis of actual cases that have come to our attention we find it extremely difficult to find out what is acceptable.


Paul Joseph James Martin: We are having no difficulty. If you have any cases of that kind, please bring them to my attention.


Frederick Davis Shaw: I have had occasion to refer quite a number of them over the years. The point is that you are putting your applicants to much more trouble than they were put to before, let me put it that way.


Paul Joseph James Martin: I think much less.


Frederick Davis Shaw: As one who has had to deal with these cases I know how long it has taken, and how many letters have had to be written, to enable these people to establish their claim to a pension. I realize that the minister can continue saying it is much easier now, and I can continue to say it is much more difficult. I believe he will find that, on the basis of cases we have encountered-I believe all hon. members will be in agreement on this-it is much more difficult.

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The member for Winnipeg North Centre (Mr. Knowles) dealt quite adequately and properly with this question of liens. Frequently when this subject is mentioned it creates an entirely wrong impression. It is a fact that the federal authorities did not have liens filed against properties. There were a number of properties on which no liens were filed, but at the same time in those cases where provinces did file liens they did so to protect themselves. They were under an obligation to make certain recoveries, and to make payments to the federal authorities resulting from those recoveries. While I never did like the idea of liens and I am not trying to defend them, I merely assert that those provincial authorities that did use the method of applying liens did so because they did not want to be trapped as the result of not having collected the money which Ottawa would demand.
The old age security committee did not make any specific recommendation respecting the method of financing this scheme. We realized fully that this was a highly technical subject, and that it was a government responsibility. Moreover some of us felt that unless the method recommended met with the approval of the government the whole report of the committee might be thrown out. No doubt, too, there would have been a very serious division within the committee had we tried to narrow our ideas down to the point where we would make a recommendation with respect to financing. I am not going to endeavour to go into any detail at all with respect to what the Minister of Finance (Mr. Abbott) said. I believe that, in the final analysis, it will be found his proposals are not quite as simple as they sound. As a matter of fact they are going to become quite involved. Closer examination of these proposals certainly reveals to me that a number of most undesirable features are contained therein.
I was impressed by the points made by the member for Winnipeg North Centre concerning the ceiling that is being imposed on income tax that is to be paid into the old age security fund. It is an argument that will require a great deal of answering by the Minister of Finance.


Douglas Charles Abbott: It will not take very long.


Frederick Davis Shaw: We realize, of course, that when the bill comes before the house we shall have an opportunity of dealing with the various sections. I know one thing we shall do; that is, make very searching inquiries as to why the Minister of Finance has made an effort to attach some degree of respectability to the

sales tax which has received such condemnation over the years. It occurred to me that this may well be a move on the part of the minister to put the members of the opposition in the position where, if they criticize the sales tax, it could be said that they were criticizing the old age security measure. Some of us have been here long enough to know that that method is often employed by certain government officials. I shall not take more of the time of the house upon this occasion, Mr. Speaker, but when the bill is before us we propose to give it a rather searching examination.


Mr. Clarence Gillis (Cape Breion Souih):: I am sorry to have to keep you in the chair a little longer, Mr. Speaker, but I wish to say a few words on this subject. It is one that most of us have been interested in for a long time. It is rather unfortunate that the speeches of both ministers were made only this afternoon. They were both lengthy and contained many complexities that are not easy to sort out. I shall deal with the Minister of Finance (Mr. Abbott) merely by saying that, as usual, he made an excellent speech. At this time I would not want to stick my neck out and say whether or not I accept his method of financing this scheme. He has had the advantage of studying the matter for a long time with experts, and he thinks it is O. K. Until I am able to read his speech and make up my own mind as to whether this is the best method, I am not prepared to commit myself. Frankly, just listening to him, it sounded all right to me. There have been many recommendations concerning methods of financing an old age security scheme in Canada. Some of them were rather weird, and it took courage for someone to sit down and put these figures on paper. At least it is a good starting point. I shall reserve judgment on that matter until a later date.
I am sure the Minister of National Health and Welfare (Mr. Martin) felt quite proud this afternoon. He made an excellent speech. To give credit where credit is due, I believe he has something to be proud of. The minister has been here since 1935. Back in 1935 to 1940 social security was rather a sorry thing in this country. Ten years ago when one asked for a pension of $40 a month and the removal of the means test, he was considered crazy. The minister has always been interested in this subject, and I know he was quite proud to be able to announce this afternoon that at least one of the goals we have all struggled for, the abolition of the means test at age seventy, had been achieved. I am not criticizing his speech at all. It was a

good speech. However, in curing any of life's problems one always creates other problems. I am going to deal with one of the problems the removal of the means test did create in some of the provinces.
When the means test was applied at age seventy the federal government paid 75 per cent of the pension and the province of Nova Scotia at least made a gesture towards the old age pensioner by providing him with what was called medical aid. There was not very much aid attached to it. The province appropriated 80 cents per year per pensioner. If a pensioner felt that he needed a medical examination he could go to the doctor of his choice and have that examination. Out of that fund the provincial government paid the doctor for the examination, and that was the extent of the medical aid. The pensioner paid for whatever medicine he got, and so forth. This 80 cents per year per pensioner was at least some help. As soon as the federal government decided they were going to assume responsibility for the old age pension at age seventy without a means test, the provincial government of Nova Scotia notified the pensioners that they would no longer continue that medical aid. Thus it will be seen that while we have given them something federally, in removing the means test, the provincial government has taken something from them. That is a point that has to be considered in our whole social security thinking. No uniformity in handling the care of the aged of this country can be achieved because there is no uniformity of provincial income. Alberta, British Columbia and Saskatchewan provide their old age pensioners with allinclusive medical aid: doctor, hospital and so forth. Ontario now is promising to do it, but they are still not doing it. The rest of the country then is being discriminated against because the pensioner in those provinces I mentioned is receiving much more than is the pensioner in the other provinces, owing to the fact that the provincial income in those other provinces is not sufficient to provide medical aid. That is one of the problems we created by removing the means test. I think it was an ill-advised move on the part of the government of Nova Scotia to discontinue that bit of medical aid that the pensioner received.
As to this matter of proof of age, I should just like to say this. I agree with what the hon. member for Red Deer (Mr. Shaw) has said, if things are as he says they are in his province. Maybe the difficulty existing in the provinces in which they have that problem arises out of the fact that the administration there is not doing all the things that can be done.
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Paul Joseph James Martin: The hon. member found the situation really satisfactory in Nova Scotia, did he not?


Clarence Gillis: Yes, I did. When I went home in August there was apparently quite a tangle. All the people who anticipated receipt of this pension at age sixty-five began to put in applications along with what they called a delayed certificate issued by the provincial government, and based on some record they submitted. It was an official certificate. But the registrar for the federal government was not taking that certificate. I had some correspondence with him, and I want to say that he is one of the best people I have done business with. I have known him well for some time. In a few weeks he completely ironed out that problem, by accepting the delayed certificate back to 1949, if it was issued in that period, and other records that were available and I think are available to most of the provinces if they want to get them. Since the latter part of August I have not heard a word about any difficulty - in that province with regard to the establishment of age. That was a problem we created. As to Nova Scotia I think it is cured, and I think it can be cured across the country without a great deal of difficulty. But I want to impress on the minister the necessity of trying to work out, in conjunction with the schemes now in effect, provision for some medical aid for the aged pensioner. It cannot be done on a provincial basis unless you can bring about uniformity of income, which is not possible. Some federal aid will have to be given to the provinces that are not in a financial position to handle the problem. That whole question of health is important; and it is dealt with in a lop-sided manner today. I am not going into the matter now, but recent figures indicate that the situation is badly out of balance as between province and province.
The hon. member for Winnipeg North Centre went into detail with regard to many matters. I sit behind him, and I agree with him on most of them. There is no need for me to repeat what he has said, but I should just like to emphasize that point with regard to putting a ceiling on the amount of money people in the high brackets will contribute to this pension fund by way of income tax. I do not think that step can be justified. When the government were talking about removing the means test and making this pension applicable to everyone, the general assumption across the country was that those who did not need it would pay it back through their income tax. But as a result of this provision that is not going to be done.

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It is going to create a great deal of controversy on the part of people in the lower income brackets.


Douglas Charles Abbott: I know my hon. friend wants to be fair. They will pay it back. The $480 will go into everybody's income as taxable income, and will be subject to tax at the appropriate rate. The 2 per cent contribution tax, or whatever you want to call it, is in addition to any other income tax that may exist.


Clarence Gillis: I said a moment ago that I did not want to get involved in any financial discussion until I had time to think the matter over.


Douglas Charles Abbott: I think that is wise.


Clarence Gillis: As I understood the hon.
member for Winnipeg North Centre (Mr. Knowles), he claimed that if you had an income of $100,000 a year there was a ceiling on the amount of that income that was taxed for this purpose.


Douglas Charles Abbott: If you have an income of
$100,480, we will take at least $420 of that extra $480.


Clarence Gillis: Why limit the total amount that is taxable for this purpose?


Douglas Charles Abbott: I will deal with that matter when we get into committee. I indicated that
1	am suggesting that this contribution for this purpose, whether from the sales tax, the income fax or the corporation tax, should be based on the benefit principle. I will elaborate on that point when we get into committee.


Clarence Gillis: I am not going to argue about the matter now, but I do say this. If I have $10,000 income on which to pay tax, and you are levying a special tax for the purpose of building up this fund, my total income should be taxed for that purpose at the additional
2	per cent. As I said a moment ago, it is a point that -can be badly twisted and you can get a great deal of adverse criticism.
I should like to say something about the war veterans allowance, and to impress this as strongly as I can on the Minister of National Health and Welfare (Mr. Martin) and on the Minister of Veterans Affairs (Mr. Lapointe). We have removed the means test at age seventy and we are going to pay that pension to anyone in this country who is eligible by reason of residence qualifications and who has reached that age. There is no discrimination; it is across the board to everyone. That means test is out, with one exception; and it is not the fault of the old age security legislation. The War Veterans Allowance Act still sets up a glaring discrimination with regard to men who are in receipt of the war veterans
[Mr. Gillis.)
allowance. That discrimination was put there some considerable time ago. That means test was written into the War Veterans Allowance Act when there was no thought of removing the means test under the Old Age Pensions Act. The act is worded in such a way that it is impossible to get around it unless the provision is removed. In the War Veterans Allowance Act there is a short clause that states that no person who receives the old age pension can receive war veterans allowance. I understood the hon. member for Winnipeg North Centre (Mr. Knowles) to say that you might be able to get $10 a month. But as I read the War Veterans Allowance Act you cannot get anything by way of war veterans allowance if you are in receipt of the old age pension.
The men on war veterans allowance have hospital care, doctor, medicine and so forth. Their income is small. A single person receives $40 a month. It certainly is not enough to get along on. I cannot understand why the veteran who is obliged to take his war veterans allowance because he is prematurely aged, who was broken down in the service of the country and is eking out an existence on $40 a month, which is just about enough to pay his room rent, should be discriminated against. I do not understand why we should make a distinction and refuse to grant him an old age pension of $40 a month without the means test. If it brings him into the tax brackets, then he is taxable. The great majority of those in receipt of war veterans allowances are people who cannot establish a disability pension. They have been broken down prematurely, and they have no other protection. They have been eking out an existence on that kind of income for years. They will never be in the tax bracket. Why should we continue the discrimination under the War Veterans Allowance Act that was written into it years ago! It was ^ never designed to set up the kind of discrimination it sets up today as between one citizen and another in this country.
If we are to make this old age pension at seventy applicable to all our citizens we have to ask the Department of Veterans Affairs to amend the War Veterans Allowance Act by taking out the prohibition against an applicant who is in receipt of the war veterans allowance and who may be eligible for the old age pension. There will not be so many of them, but there are a few. I strongly urge the Minister of Veterans Affairs to get in touch with the Minister of National Health and Welfare and straighten out that point. A continuance of that discrimination which is in effect in this country today cannot be justified. People

are amazed when we tell them there is a clause similar to that in the War Veterans Allowance Act.
We must admit that we have made a lot of progress in this field in the last twenty-five years. All the measures that have been brought in within the last few years have been an indication of progress and of a consciousness on the part of the government that social security is a necessary part of our way of life. Yet I think the objective we should set for ourselves is to see to it that the type of pension we have established now, the universal pension at seventy without the means test, should be extended to those aged sixty-five. I think the whole thing should be levelled down to that age, because when the average person slugs it out in life until he is seventy he does not get very much enjoyment out of life after that. There is not much life left; there is no doubt about that. I believe that a man at the age of sixty-five-unless he has been a senator all his life, or a member of the House of Commons-if he has been a fisherman, a farmer, a steelworker or a miner, or employed in a heavy type of industry, is not thinking about much other than sitting back somewhere quietly and smoking his pipe. He has a lot of kinks in his spine by that time. I know it is the hope and mission of the Minister of National Health and Welfare, and I hope of his colleagues in the cabinet, to see to it that the age limit is brought down to sixty-five so that people may enjoy themselves for a few years anyway. In addition there is the matter of providing ways and means of at least enabling the aged pensioner to have medical examination when it is necessary, because if he went to the average doctor today and got the kind of check-up he should get it would cost him a couple of months' pension. I think that whole field should be looked into. The field of medicine should be made available. They are doing it in British Columbia; they are doing it in Saskatchewan; they are doing it in Alberta and they are talking about it in Ontario.


Mr. Blair:: We have had it for some years.


Clarence Gillis: Not on the scale they have it in the other provinces. There is an election on now.


William Gourlay Blair: They have had free treatment for quite a few years.


Clarence Gillis: I am not going to argue with you, doctor. Perhaps you have treated a lot of people free for a long time.


William Gourlay Blair: They have a card they can sign.


Clarence Gillis: That is the kind of person you are, but it does not apply generally throughout
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the province. I have been in sections where they have told terrible stories. There is an election on now and a lot of good hospital schemes are being offered. I hope they get them. At least it does some good to talk about them.
I am not going to take up any more time of the house at this time, Mr. Speaker. I think our next objective is to cover the field of health and lower the pension age to sixty-five.
Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.


The Deputy Chairman:: Is it the pleasure of the committee to adopt the motion?


William Gourlay Blair: No. Either yesterday or the day before the minister promised to clarify the situation regarding proof of age. I hold in my hand samples of the letters I am constantly getting in regard to this; discrimination about the use of the family bible, taking the pages out and so on. I have one case here, and it is typical. This man is eighty-two years of age. I know him very well. He went to the clerk of the village in which he lived, showed him the family bible-there is no birth certificate available for him; his birth was not registered-and he received an affidavit from this official saying that he had seen the bible in which the birth was recorded, giving the date. This was returned as not being acceptable. On the advice of the lawyer this old gentleman then sent the family bible to the regional office, or a page taken from the family bible, rather than send this immense book of itself. He is waiting, but he feels that there is not much chance of its being accepted. This man's wife is in the same position. She is about eighty years of age. She has no birth certificate either. Although there is a family bible in existence she is having difficulty in obtaining the use of it because other relatives will possibly need it.
I have a second letter here which indicates that an elderly gentleman sent a sworn affidavit from one who had examined the family bible. This was returned. Now in so far as these books are concerned, take the case of the first elderly gentleman who was born in the year of confederation. Other transcripts have been made out of that book for the use of other members of the family, and it is quite possible that it will be difficult even to get the original back. Something should be done. It is going to be very, very difficult, unless you go back to the census, to prove the age of some of these people. One spoke to me the other week end. He had forwarded a baptismal record taken from the church. It was over the name of the church and the

Old Age Security
pastor in charge, but that was not accepted.
I feel that when an affidavit is taken by a person capable of taking an oath and permitted by law to do so, such as barristers and solicitors, it should be accepted. The average person would hesitate to commit perjury over a thing like that. Certainly one should be entitled to believe that a lawyer, although they were under some criticism yesterday, would furnish a true account of age to the people concerned. There is going to be a great deal of difficulty. Although the minister suggested the other day that this was being well dealt with, and that there was no trouble, yet I find many cases where proof of age is difficult. I do not understand why there should be so much difficulty. I remember that my own birth was not registered. In order to prove life insurance age I was able to get the affidavit of an elder brother, so that all my insurance receipts now come back with the notation, "your age has been admitted." That has come about through the one affidavit of my brother. So I think in respect of these old age pensioners something should be done to make it easier for them; because it does seem ridiculous that a man born in the year of confederation should have difficulty in his attempt to prove his age. '


Mr. Mclvor:: May I have only a brief word. First I would say that this is a mighty fine day for Canada. And let me tell the hon. member for Peel and other members of the committee that my experience with the administration at Toronto has been most satisfactory. I remember a case of a young man in Manitoba. This particular young man, who was partly grown when I was a boy, could not get a certificate. He had never been registered. His parents were not interested in that sort of thing so long as he had enough to eat, and had a good time. However I certified that he was four years older than my brother, that my brother was a certain age, and that this would make the man in question seventy-one years old. He got his pension.
Last year in Quebec I was connected with a case concerning a lady who, I felt, was seventy years of age. She showed me the family bible. I certified an extract from that bible, and she got a pension. I am sure it will be shown that those who administer this measure will direct their efforts so as to favour those who need the pension.


Paul Joseph James Martin: Mr. Chairman, I might deal at this time with the points raised by the hon. member for Lanark. Perhaps the hon. member will read tomorrow in Hansard what I said today. If he does he will see that the situation is not just as he portrayed it. The fact is that we began these registrations on

July 20. About three months have elapsed. When one realizes that at this time some
500.000	out of an expected total of about
700.000	old age pensioners have now had their applications approved for payment, he surely cannot seriously make the suggestion that the situation is in any way confusing. The facts show just the contrary. I will not say, of course, that sometimes there are not difficulties; but I shall deal with them later. In my view the departmental people have done an amazing job. I never expected, and I am sure my colleagues never expected- nor did the hon. member for Winnipeg North Centre who urged me last year to do a lot of advertising-that it would be possible in three months to have this achievement, for which I am not taking the credit but for which the people in treasury and in the family allowance office must get the credit. They have done an amazing job.
Then, with regard to bibles: I suggest the point has been over-emphasized. In Ontario, of the applications received and approved, only one per cent submitted proof by way of bibles. In the other provinces the percentage is even lower than that. But the one per cent in Ontario represents the amount of evidence through bibles-and, theoretically, to cover myself, through the old testament- that has been offered as evidence.
I am sure the hon. member, who is a responsible member of parliament, would insist that in the dispensation of large amounts of money, as in this instance, the government has not only the obligation but the clear duty to see that people who are not qualified do not receive the pension. Surely that is elementary, and good government. No one wants to see anyone get a pension from the moneys to be provided unless he or she is entitled to such pension under the law. That is only elementary good government, and I am sure no one in the house would take any other attitude. Certainly I do not propose to do so.
The types of evidence that may be offered, in addition to the bible, include birth certificates, baptismal certificates, records in family bibles, church rolls or registers, marriage records, communion certificates, military discharge papers, naturalization certificates, passports, acknowledgment of age by insurance companies, assessment rolls, jury lists, pension superannuation records, and records of commercial employment.


Daniel (Dan) McIvor: That is good enough.


Paul Joseph James Martin: It is not an exhaustive list, but it is the kind of list we are using.


Mr. Green:: What about census records?


Paul Joseph James Martin: I am coming to that. The hon. member for Cape Breton South pointed out that in one province there has been no difficulty in connection with census records. The situation is that, under the law as it now stands, that material is not available for use beyond the control of the director of statistics. That is the law now.


Donald Methuen Fleming: It is available under the Old Age Assistance Act.


Paul Joseph James Martin: Yes. In the bill to be based on this resolution authority is being given for the use of census material. There is no legal foundation for using it outside Ottawa and beyond the control of the director. And, as has been indicated to me by the parliamentary assistant to the Minister of Trade and Commerce, even then such information will be limited to only one factor, namely that of age.
I repeat that there is no difficulty. People have written; there has been correspondence, but I have yet to have produced before me any letter-not one-in the over 800,000 sets of correspondence we have had with old age pensioners, in which there has been a charge that we were being unfair in the kind of evidence we were demanding. The suggestion is made that we should merely pick out a leaf from a bible. In the first place we are not anxious to encourage people to destroy a book for which they have the highest regard. But people have sent in pages of bibles. We have had photostat copies made of the originals, to make sure in a particular case through the texture of the page and through its fitting exactly that it really was a page torn out of a particular bible.
I regret to say that in a few instances we have had cases where pages were sent in where we were able to establish clearly that they had not belonged to the bibles to which they were supposed to have belonged, and that there had been fabrication. Let me hasten to say that I would not wish to leave the impression that that was at all general, because it was not. Most people in this country are honest. However, in the administration of a measure like this involving a good deal of public money the job of the administrator is to take great care, and great care is being taken.
I do not know just what my hon. friend meant when he referred to abuse being heaped upon solicitors. I take it that he was not referring to anyone in particular; he nods his head, so I shall not go on to say what I had in mind. There is no suggestion about questioning a lawyer sending in a statement based either on his own declaration or upon the declaration of someone else, but the fact is that is not proof of age. It is purely a statement made under oath saying that he has
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examined the document, found the name of so and so to be such and such and the date of birth to be such and such. That is all it is. It is evidentiary, but it is not complete evidence that the document upon which the affidavit is based is bona fide.
We had one case where there had been a complete erasure, but an affidavit was sent in signed by a solicitor located not very far from this city. I am quite sure the solicitor was absolutely honest; there was no doubt about his integrity, but we do know positively that the affidavit was based upon a document -I hesitate to use the word "forged"-which did not indicate the true facts. I am not trying to give the impression that this is a normal situation, but I do want to indicate that care must be taken.
In the final analysis no one can expect anyone to take the responsibility which belongs to the departmental officials. That is our responsibility. We are using a uniform practice across the country in connection with evidence as to birth which I think is working out quite well. We have three months yet to go and I am sure that before the end of that time those who can qualify or who wish to qualify will have qualified. My hon. friends suggest that we should be exercising common sense. I think we are exercising common sense consistent with the care the people of Canada will expect us to exercise in respect of a matter so important as this. When you realize that 500,000 applications out of an expected total of 700,000 have already been processed at a time when there is still three months to go, three months ahead of the passage of the act, ahead of the authority to pay out any money, instead even of mild censure I think the departmental officials should receive, as I know they really deserve, the approbation of every member of this house.


William Gourlay Blair: Possibly the minister was not in the house when the hon. member for Springfield (Mr. Sinnott) made some jocular remarks about the number of lawyers in the cabinet. I did not mean to be derogatory about that profession, but I would point out that we are not going to settle this in the next three months. Next year will bring along another group of applicants, and this will go on.
It is not easy to ship a large family bible to the department. Personally I would hesitate to take a chance in doing so. I would feel like taking it in myself, but that is not always possible. I am appealing to the minister to provide some form which will make it easier. I am not suggesting that we should defeat the purposes of the act, because I realize that we should not pay those who do not deserve it, but there should be some form

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of declaration or some other easier method than shipping such an. unwieldy book to the department.
This problem will arise for the next twenty years because even in Ontario there are many persons whose births were not registered.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Mr. Herridge:: It was not my intention to say anything at the resolution stage of this measure. I listened carefully most of the time to the minister's speech. I am always very careful when listening to the minister because one is inclined to be disarmed by his eloquence, and I want to read in Hansard tomorrow the exact arrangements that have been suggested as indicated in his speech. I want to mention two points, inasmuch as they were mentioned by previous speakers just before the dinner recess. The hon. member for Winnipeg North Centre and the hon. member for Cape Breton South brought to the attention of the minister the position of men under this legislation who are drawing the war veterans allowance at seventy years of age.
We are still not clear as to the government's intentions in this respect. The officials of the department have given a great deal of study to the financial aspects of these proposals. They have had time to work out a new arrangement with regard to annuities, but apparently there has not been sufficient time to make any concrete arrangements with respect to war veterans 70 years of age, receiving the war veterans allowance. As several of us understand it, under present legislation and the new proposal there will be nothing extra for war veterans over 70 who are receiving war veterans allowance. If we are correct in our understanding of the minister then a good many of us in the house think that is somewhat unfair. A person receiving the war veterans allowance receives it because he is supposed to be pre-aged on account of front line service. If provision is not made for these men over 70 to receive the old age pension it means they will be practically the only group in Canada drawing a regular income from other sources who will be barred from receiving the old age pension. Millionaires will be able to receive it. Persons receiving superannuation and industrial pensions, annuity benefits or who have any other source of income will receive it. As we understand it, at the present time the war

veteran on war veterans allowance, and existing on that allowance at that time, will not receive anything extra under this legislation after he reaches 70 years of age. If I am not correct in that respect I am sure many of us would be pleased if the minister would clarify that point.


Paul Joseph James Martin: I think I should repeat what I said today. All persons in receipt of war veterans allowance, who can prove they are 70 years of age and who have the required residence in Canada, are eligible to apply for and receive the universal old age pension like anybody else.


Howard Charles Green: But will they lose the war veterans allowance?


Paul Joseph James Martin: Let us deal with that in the proper way. We are now dealing with the old age security legislation.


Herbert Wilfred Herridge: That is the point I was
making. I am sure a good many members will not agree with that treatment of veterans receiving the war veterans allowance. While I am on my feet there is one other point I should like to raise. It comes to mind because of certain comments early in the debate with respect to the difficulty of proving age in a number of cases. The minister mentioned that the percentage was small. If I heard him correctly, I think he said one per cent.


Paul Joseph James Martin: What I said was that in the province of Ontario to the extent of only one per cent was proof of age being offered by the production of bibles or the old testament.


Herbert Wilfred Herridge: Then I did not hear the
minister correctly, but the percentage of those not able to prove their age in the manner required by the act probably would be very small. At the same time, however, it is a most serious matter for those who are not able to do so. I mention this because I have encountered a number of cases of people who were known to be 80 or 85 years of age, and who could not obtain the old age pension because they could not prove their age. I refer particularly to people born in the Northwest Territories where records are not available, where births were not registered; and the same is true of people in other parts of Canada. I want to make this point. The department of immigration makes provision when deciding whether or not to admit a Chinaman, let us say, to Canada to use the X-ray method of determining the Chinaman's age. I should like to know why it is not possible to X-ray older people if age can be determined by X-ray. I have a letter

here from the immigration department with respect to the admission of a Chinaman. It reads:
With reference to your application for the admission to Canada of your son, Wong Soo Sing, I would inform you that the examination has established that this young man is not of the age claimed, and that he could not have been born on February 15, 1934.
That was established as a result of an X-ray examination. If X-ray examination can determine a person's age-and on the basis of such examinations many people come to Canada-I should like to ask the minister why his department does not use the X-ray method when it comes to older people who have no other way of proving their age. I should like the minister to answer that question.


Paul Joseph James Martin: I am advised by the medical profession and my own medical officers, more particularly by my parliamentary assistant, that you cannot determine the age of adults by the use of X-ray, that medical science has no known method of determining the age of persons who are beyond the age of 18, let us say. In the case of children X-rays are used as a guide but they are not used as an absolute determinant of age.


Herbert Wilfred Herridge: In one case the man was 21. They definitely established the fact that he was 21 and not 16.


George Harris Hees: I feel sure the minister is just
as keen as any other member to make it as easy as possible for people over 70 to establish their age. I agree with the hon. member for Lanark that it is very difficult for old people to send a bulky and valuable document like a family bible or old testament a long distance in order to certify their age. I suggest to the minister that either a judge or crown attorney could make out an affidavit to the effect that he had examined the family bible which had been brought to him by the applicant. He could testify in the affidavit that it was recorded in the family bible that the applicant was born on a certain date. That would make it a great deal easier for all applicants. They could simply take the bible to a crown attorney, or a judge, and"*get him to make out an affidavit. I am sure the Department of National Health and Welfare would find it possible to take that as evidence. Will the minister comment on that suggestion?


Paul Joseph James Martin: I have already dealt with the
question. I suppose my hon. friend was otherwise occupied, perhaps outside the house or even inside, when I addressed myself to the question put by the hon, member for Lanark. I have already dealt with that very aspect of the problem. It took me about ten minutes to do so. I hesitate to repeat the
Old Age Security
whole reply again, but I am sure my hon. friend will be glad to read Hansard, and I will certainly read his very pertinent observation.


George Harris Hees: I was in the house while the
minister was answering the questions put by the hon. member for Lanark. I talked to the hon. member for Lanark after we rose at six o'clock, and neither of us is of the opinion that the minister answered the particular question put to him. It would take a very short time for the minister to answer it. It is most important to all applicants for old age pension, and the minister might take about two minutes to answer it.


Paul Joseph James Martin: Without repeating everything, I will simply say that it is not a question of not accepting the word of any person as to what a particular document contains. That is not the point. The point is to make sure that the information contained in the document is a true representation of what is alleged. A mere affidavit saying that there is a document to the effect that so and so's name appears, his address and his age, does not prove that is in fact the person's age. As I said in answer to the hon. member for Lanark, we have had cases where documents were actually produced to us, through some other party, and we did not accept that. We wanted to make sure the writing thereon was a true representation of what is alleged. We have had such direct cases where there was fabrication.


George Harris Hees: The one difference is that the
minister was referring to affidavits made by lawyers or members of the family. I think it is a completely different thing if the affidavit is made out by a judge or crown attorney. I believe they are reliable people, and their word should be taken.


Paul Joseph James Martin: As a lawyer I respect judges, but I do not think that they are any more honest than lawyers.


Mr. Quelch:: I understood the minister to say that no charge would be levied against old age pensions. Can he give me any assurance regarding the recipient of war veterans' allowances who at the present time is suffering a deduction from his allowance in order that the Department of Veterans Affairs can recover an overpayment? If the recipient of a war veterans allowance applies for old age pension at seventy, will the Department of Veterans Affairs be in a position to collect any overpayment by having it deducted from the old age pension?


Paul Joseph James Martin: I am sure my hon. friend will appreciate that what we are dealing with here is the old age security legislation. I have indicated clearly that we are excluding

Old Age Security
from the operation of that act no segment of the population, providing proof of age and residence qualifications are established. Beyond that I cannot go. The member's question is one that should be, in the first instance, addressed to the Department of Veterans Affairs. I suspect the minister would say that when the legislation dealing with the particular matter is before the house he will be in a position to deal with the question. I should point out also that the minister indicated a few days ago a committee was to be established, and undoubtedly that kind of question will be dealt with. The only matter before the house now is the question of old age security. I have said that no group will be excluded from its operation. I do not believe I can go any further than that.


Victor Quelch: The minister said no liens can be placed against the old age pension. He said a creditor will not be able to seize the old age pension. I am asking whether or not the government will be in a different position, and whether it will be able to seize the old age pension for a debt owing to the crown. Surely that deals directly with the old age pension and the minister can answer that.


Paul Joseph James Martin: I do not know how helpful the answer will be, because we are dealing with the old age security legislation. Legislation is in existence now concerning debts to the crown, under which the crown has a right to recover from anyone any debt owing to it. This is not a new act; it has been on the statute books for a long time. I have no hesitation in saying that if anyone owes the crown any money the crown has an obligation to recover it, but its recovery will be under the appropriate legislation which is now on the statute books.


Victor Quelch: That would) mean that any person who owed) money for income taxes or for overpayment on a war veterans allowance might have that amount deducted from his old age pension. The minister has said, that this pension is supposed to give universal protection, but in this case there would be no protection to anyone in the unfortunate position of owing money to the crown.


John George Diefenbaker: There is one question I should tike to raise at this time, and' not with a view to holding the matter up at all. The financing of this old age security plan was outlined' this afternoon by the Minister of Finance. In passing I thought he referred to the large surplus he has built up during the last few months as a rather small surplus. That was rather a masterpiece of understatement. None the less the surplus has been built up. As I understand the system of financing

there is to be a 2 per cent sales tax, at 2 per cent addition to the income tax, and a 2 per cent corporation tax. That being so, and in order to assure that what we are doing is in fact constitutionally correct, I should like to ascertain from the minister how it is that in discussing the resolution now before the committee we are departing from the regular constitutional procedure in the imposition of new taxes to meet the old age pension requirements.
As I understand the British constitutional development and our own which is based thereon, in the imposition of taxation it is necessary that the customary motion be made by the responsible minister that the Speaker do now leave the chair for the house to go into committee of ways and means, and also the other motion that the Speaker do now leave the chair for the house to go into committee of the whole for discussion, first of the principle of the resolution, and second of the ways and means whereby the necessary funds will be made available. I should like to ascertain from the Minister of Finance whether or not this phase of the matter has been considered. I know of no case, and I looked into the constitutional authorities on the subject, where legislation similar to that before this committee today has ever been before any parliament without the customary procedure being followed. I raise this point, not for the purpose of holding up the matter in any way-I do not want anyone to misunderstand me-but with a view to ensuring that what we are doing is not making a short cut through our constitutional procedure that may subsequently become a precedent.
Having said that, and while the minister is looking up the authorities on that subject, I should like to mention one other question. I discussed it with the hon. member for Vegre-ville. I do not know whether or not he is in the chamber at the moment, but it is a matter that affects many people in all parts of this country in establishing proof of age. Those who came to Canada from continental Europe, some sections of which are now within the shadow of the iron curtain, find that all legal documents respecting registration of births and the like are unavailable to them. What general plan has been decided by the department to make it possible for those people to establish their age? I believe this matter deserves some consideration over and above that given to the matters raised by the hon. member for Lanark and the hon. member for Broadview. I know of numbers of cases in which people fully qualified by age, and in this category that I have mentioned, are unable to establish their age and will have great difficulty in

being able to do it, the family bible being in Europe or some other part of the world, and no one older than themselves being available to swear an affidavit as to the date of the birth of the applicant. In consequence, unless there is some relaxation of the rules as of this date, many will be denied that to which they are entitled.
At the same time I should like to mention one other matter-because I do not want to occupy the time of the committee by repeated questions-and to ask the minister if he will give an answer when he speaks. Today he mentioned the fact that in no case had the federal authority ever requested or suggested the filing of a caveat against the lands of an applicant so there would be a degree of recoverability of the amount paid to old age pensioners, after their death. I should like to ask him, however, whether it is not a fact that recoveries have been made against the estates of deceased old age pensioners and also whether or not the federal authority has not received, from some of the provinces, a share of the moneys so recovered. When the minister is answering that question, he might answer this further one. If such be the case, I should like him to give the figures as to the recoverability of moneys paid to pensioners, according to the amounts in the several years from 1949 to date, by provinces, so we will understand the degree to which the registration of caveats or charges against the estates of deceased pensioners has, in fact, been utilized for the purpose of recovery of some part of the pension paid.
There are some other matters I might refer to later on, but these are some questions that occur to me. In raising the initial matter with the Minister of Finance I do so because I believe it deserves attention. Today for the first time in my experience this procedure is being followed. I have looked up the constitutional authorities in the library, and this is the first instance I can find of the preliminary procedure not being followed whereby the Commons in fact becomes the guardian of the public purse. Through the continuance of this method of procedure, which is not a fiction, parliament retains control over the purse and over the requirements of the crown as represented by the cabinet.


Douglas Charles Abbott: To answer the legal point raised by my hon. friend, Mr. Chairman, may I say at the outset that the procedure being followed here is the procedure which was recommended by the law officers of the crown and approved by the law clerks of the House of Commons. I appreciate that this is not a direct answer to the question which has been raised by my hon. friend. However, the
Old Age Security
point he raised would appear to be covered by standing order 60 of Beauchesne's second edition, which reads as follows:
If any motion be made in the house for any public aid or charge upon the people, the consideration and debate thereof may not be presently entered upon, but shall be adjourned till such further day as the house thinks fit to appoint; and then it shall be referred to a committee of the whole house, before any resolution or vote of the house do pass thereupon.
Of course the usual rule applies that no charge may be proposed or suggested except one based upon a resolution which is introduced by a member of the privy council. That rule would appear to indicate that on one day's notice a resolution preceding a measure which imposes a charge upon the public purse may be introduced, as this one has been introduced.


Mr. Wright:: It is my understanding that under this universal old age pension, as under the previous Old Age Pensions Act, pensions would be paid to Canadian citizens only while they continued to reside in Canada. They may leave for a short visit, but they cannot take up permanent residence outside Canada and receive payment. During the war a great many girls in this country were married to airmen from various parts of the British commonwealth, and great numbers of our Canadian soldiers and airmen married in Great Britain. There is no doubt that a large number of our citizens, in the later days of their lives, may want to go and live with their children in some other parts of the commonwealth. Has the government had any conversations or negotiations with other parts of the commonwealth that have social security schemes, with a view to having these pensions, or a portion of them, paid to residents of Canada when they take up residence in other parts of the commonwealth? I think something should be done in this regard, because I am sure a great many of our citizens may find themselves in that position in the later years of their life.


Major James William Coldwell: I should like to support the hon. member for Melfort in what he has just said. My understanding is this: At the present time, for example, a British old age pensioner receives his pension as of right; he receives it because contributions have been made. If the old age pensioner comes to Canada, for example, that pension is paid to him in Canada, regardless of the length of time he is in Canada, because he receives that pension as of right in view of his contribution. This plan, as the minister said this afternoon, is in effect a contributory plan, as I understand it. Consequently it is paid to an old age pensioner, I take it, as

Old Age Security
of right, in exactly the same way as the pension to the British old age pensioner is paid as of right, on account of contributions made. If the British old age pensioner receives the pension as of right, on account of contributions made, it seems to me that, by the same token, a Canadian citizen transferring residence, as mentioned by the hon. member for Melfort, to the United Kingdom or elsewhere should also receive that pension as of right on account of contributions that have been made, if this is a contributory plan, as I understand it is. I should like the minister to say something about that matter.
While I am on my feet I might follow the example set by the hon. member for Lake Centre and say that I thoroughly agree with those who have brought to the attention of the house the necessity for making some provision for the establishment of age on the part of those who are unable to get proof from the places where they were born, or who cannot produce a prayer book, bible, or something of that sort in the way of a record. When these people come to this country they receive a landing card. They are on the manifest of a ship. As I understand it, at the port of entry a record is made of their entry; and if my recollection serves me correctly the age of the immigrant is given on the manifest and on the record. Would it be possible for the immigrant to establish age on the basis of entry into Canada, or failing that, on the first census taken after his arrival in Canada?


Paul Joseph James Martin: Perhaps before I get lost in the three questions that have been asked I had better deal with them now; and I will deal with the last one first. There are many types of documents that may be used to establish satisfactory evidence of birth, in accordance with the practice on which we have embarked. I mentioned those various kinds of documents today, before six o'clock, and I will not repeat them now. The kind of document to which my hon. friend has just directed our attention is one of those. For instance, a landing card is accepted without any equivocation as evidence of the birth of an immigrant. That brings me directly to one question put by the hon. .member for Lake Centre, who generously referred to the interest of the hon. member for Vegreville, who cannot be here at the moment but who had already spoken to me, as the hon. member for Lake Centre knows, about the same question. I may say that we had less trouble about the establishment of birth of people who have come from Europe, particularly, than we have had with a good number of our own native-born people, for the simple reason that immigration papers,
[Mr. Coldwell.l
landing cards, naturalization papers and the like are accepted readily and finally as sufficient proof for the purpose of qualification, and our practice has shown that we are not experiencing great difficulty with that group of people.
The hon. member for Lake Centre also mentioned the question of caveats and liens. He said it was true that the federal government had at no time required any province to impose a lien for the recovery of moneys due to the crown that had been overpaid for one reason or another; and that being the case, could I estimate year by year, province by province, what was the amount of such recoveries. My hon. friend will excuse me if I do not give him that detailed information tonight because I have not it immediately available, but I will give him some round figures. The fact is that under the Old Age Pensions Act, as a result of an agreement, a contract made between ourselves and the provinces, there is an obligation on the part of the latter to recover moneys that have been overpaid, or have been received by deceased persons improperly or illegally under the act. The amount of such recoveries in any one year since 1950 has never exceeded $500,000. Under the act, of course, the recovery of such moneys by the provinces has, in respect of the dominion's share, to be paid to that jurisdiction of government, and that has been done. Of course all provinces have not resorted- and it is their right, having in mind their provincial sovereignty-to the imposition of liens. The fact is we have not insisted on the imposition of liens, nor has that been done in every province. This $500,000 recovery which is the maximum received in any one year would be less than one-half of one per cent of the pension payments in any one year.


John George Diefenbaker: Was that recovered out of estates?


Paul Joseph James Martin: Yes. I think I have dealt with all the hon. member's questions. The hon. member for Melfort spoke about the possibility of a reciprocal arrangement with commonwealth countries. I can only say that two and a half years ago there was some correspondence with several parts of the commonwealth on this point. No definitive arrangement was reached, largely because some countries took the view that until there was equality in amount as well as in extent and type of the various measures of social security you could not propose a reciprocal arrangement. In any event, in the present legislation there is no such thought.
Noting what the hon. member for Rosetown-Biggar said, I can only say there will be provision in the legislation providing for the

suspension of the payment after a certain period of absence of anyone who leaves the country. That is not a unique provision. It Will be found to be in existence in at least three other jurisdictions of the commonwealth.


Major James William Coldwell: But that varies from the British practice, does it not? The British practice is that having made the contribution the pension is paid as of right as long as the pensioner lives.


Paul Joseph James Martin: There are two acts in Britain where that does not apply, but I just have not the names of them at the moment.


Major James William Coldwell: I think I am right. The other thing I want to say-and I shall be brief-is that I hope the government and the Minister of Finance will reconsider the suggestion made this afternoon that a ceiling be placed upon the amount of the payment above the middle brackets. It seems to me that what is being done is placing the burden very largely upon the middle income group, with the exemption and all the rest of it. I think it is a mistake from the point of view of public support for a matter of this description to say that for persons who have a taxable income of over $3,000 the ceiling is $60. It does not matter whether you have $50,000 a year or whether you are a millionaire; you will have to pay only the limit of $60. I do not think that is in conformity with the present view in this country.
Mr Abbott: I should like to say just a word about that now, since it has been raised again, Mr. Chairman, to tell the committee why the ceiling of $60 was selected. In the first place, as I said in my statement this afternoon, this pension is being paid to everyone as of right. It should be based on the benefit principle of taxation and in strict logic everyone should make the same contribution. As I said this afternoon, that might be considered to be a harsh thing and impractical. The contribution is going to be made throughout his or her working lifetime by every person in this country, and it will be made in the form of three types of taxes: First, the sales tax; second, the personal income tax with the ceiling indicated; and third, the corporate tax. And let us not fool ourselves; the corporate tax is paid by the users of the goods and services of corporations, so the people who are going to get the old age pension are making their contributions in one of these three ways.
On the system that is proposed it is quite clear to anyone who has the most elementary knowledge of simple arithmetic, let alone higher mathematics, that those in the medium and higher income brackets will be
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making payments into this fund greatly in excess of any benefit they may possibly draw from it. Income tax with a ceiling is only one element. It costs a man 30 years of age about $60 a year to buy a pension of $40 a month at age 70; so that the producer at 30 years of age by setting aside $5 a month could purchase a pension for himself of $40 a month at age 70. In order to pay the full $60 ceiling the married man will have to have an income of $5,000. The 2 per cent tax will only apply on his income in excess of the existing exemption, so that a married man with $5,000 and no children will reach the ceiling of $60 so far as his income tax contribution to the fund is concerned. If his income is $5,000, at that level about one-third of his income is spent on goods subject to sales tax. He will pay 2 per cent on whatever that is. Actually I think the percentage is a bit higher when you get to the $5,000 range. Up to about $3,000 the calculations which have been made show that about one-third of the purchases of people in that range-I am speaking from memory-are subject to sales tax. So if you take the man of medium or higher income, and taking the three types of contribution into account, you will find that he will be making a contribution to the fund greatly in excess of any benefit he is ever likely to draw from it.
The 2 per cent special social security tax is in addition to any other income tax which may be imposed. Today, as a result of the 20 per cent surcharge, people in the highest income brackets pay 100-8 per cent on the upper part of their infcome. Obviously it is not possible to take much more from them. But on the principle that it is fair and just that everyone should get equal payments then contributions should be made on the benefit principle. I suggest it is eminently fair that there should be some ceiling put on that portion of the fund which is built out of contributions of the income tax payer; I said this afternoon, only about half the people who earn salaries and wages in this country are subject to the payment of income tax.
After giving this matter the most careful and anxious consideration I have been able to give it, I am convinced that it is not only proper but eminently fair to have ceilings on the contributions. And the $60 ceiling, as I say, was selected-we had to select some figure-as happening to be the figure which represents the cost of an annuity at the age of 70 for a man 30 years of age.


Major James William Coldwell: Then if that is so, if it was on the basis of an annuity, by what right does the government write into this legislation any limitation as to the residence of the person who has paid for that annuity? You

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cannot have it both ways. If this is worked out on an annuity basis, then the government has no right to write into this legislation anything whatsoever which limits the residence of the individual.
And might I also say this, that while the minister made a good case, from his own point of view, 1 think this principle has to be considered; that a very large number of people will be contributing only through the sales tax, or the social security tax, on certain classes of goods. Although generally I have been opposed to the sales tax, for general purposes, I think perhaps some argument can be made for a tax of that description for social security, for a specific purpose in relation to a specific fund. That is the only contribution that will be made by many; consequently it seems to me we should expect those who have very large incomes to assist the fund from those large incomes to make up for at least some of the amount those on small incomes will not be able to contribute to the fund.
The point I want to make is that if this can be worked out on something approaching an annuity basis, then the government has no right to take away an individual's right to receive that annuity or that old age pension regardless of where the recipient may choose to reside.


Donald Methuen Fleming: I have one or two questions for the Minister of Finance: First, will the pension be taxable income in the hands of the recipient?


Douglas Charles Abbott: Yes.


Donald Methuen Fleming: The second question concerns the relationship between the social security fund and the consolidated revenue fund. Leaving out of consideration entirely any provision made out of the consolidated revenue fund under the Old Age Assistance Act passed last June or the Blind Persons Act passed last June, but thinking in terms of what the situation will be after January 1 with reference to pensions, will the consolidated revenue fund as such be relieved now of the amount it is bearing at the present time, namely about $100 million a year, which is the dominion's share of the present dominion-provincial old age pension plan?


Douglas Charles Abbott: Yes, I think that is correct. As I said this afternoon, the over-all cost of providing the no means test pension to all over 70 years of age will be about $340 million. The present cost of old age assistance, which is shared with the provinces-that is, the cost to the dominion-is at present about $106 million, and we estimate that next year it will be about $117 million. It is estimated that the cost of the new old age assistance
[Mr. Coldwell.l
program, shared with the provinces, may amount to about $35 million. So that there will be a lessening of the charge on the general funds of something in the order of $80 million to $100 million in the first year. But it was felt proper, in setting up the continuing fund for the payment of these no means test pensions as of right at 70 years, that we should provide for the full cost which, as I say, will be something in the order of $320 million to $340 million in the first year. The answer to my hon. friend's question is that in the first year there will be a lessening of the charge on the consolidated revenue fund of something in the order of $80 million to $100 million.


Donald Methuen Fleming: That point concerned the committee on social security somewhat, because they looked at the present situation and, dealing in round figures, said that the consolidated revenue fund is providing about $100 million a year and the new program would run around $300 million a year; therefore another $200 million of revenue must be provided.


Douglas Charles Abbott: It is up $40 million over that estimate now.


Donald Methuen Fleming: I want to be clear on this: the new tax proposed today-the 2-2-2 formula-will provide not just the amount
required for the social security fund over and above the amount now borne by the consolidated revenue fund, but also, if not in the first month then certainly soon thereafter, it will bear the entire burden which will be cast upon the social security fund to provide the entire cost of the pension for those 70 years of age and over. In that way the consolidated revenue fund will be relieved of the burden which now runs to something in the neighbourhood of $100 million a year?


Douglas Charles Abbott: That is right. As I said this afternoon, I want to emphasize that the estimate I have given should be considered as a tentative approximation. I would hope and expect that next spring, when we have had the benefit of two or three months of actual operation of the plan, it would be possible for me to assess the situation more accurately. But the committee will appreciate that in the 2-2-2 plan which is being recommended the two per cent sales tax is transferring an existing tax to the old age security legislation.


Mr. Fair:: The question of proof has been discussed at some length, not only at this time but in times past. My section of the country is in exactly the same position as that of others who have spoken. Before the dinner recess the Minister of National Health and Welfare enumerated a number of

methods which might be used by an applicant to supply proof of age. I wonder if the minister has sent out instructions in this connection to the registrars in the different provinces. If that is done and a little later on we have difficulty, would it be sufficient to show registrars in various places a copy of today's Hansard, so they might know what the minister has said?


Paul Joseph James Martin: I am sure today's Hansard, containing the speeches of the Minister of Finance and myself, would be readily accepted by officials employed in the government service throughout the country. I can only say that instructions went out as early as the middle of July along the lines I indicated today.
I might tell the committee that applicants in many parts of Canada have shown great ingenuity in offering evidence as to proof of age. Perhaps the most curious, to date, has been the offer of an applicant in Prince Edward Island to prove age by a tattoo on his leg which gave his name and date of birth. He was an old-time sailor but it happened that he had documentary evidence which was completely acceptable, so there was no need to delve further into the question of the tattooing.


Robert Fair: Pursuing that a little further, in the past we have had quite a little difficulty proving the age of persons who came from Europe. There are persons in my constituency who have not been able to get a pension because they could not give proof of age. At times this was due to misspelling of their names when they came to the country, or it may have happened that they were in outlying districts when the census taker came around. Will some provision be made to take care of cases such as those, so these people may no longer be denied pensions because of their inability to produce proof of age?


Paul Joseph James Martin: I have noted what my hon. friend said.


Charles Henry: May I ask a question about missionaries serving abroad? There is an elderly couple from my constituency who are both serving abroad as missionaries, and I am wondering if the time they have spent abroad will count as residence.


Paul Joseph James Martin: I stated this afternoon that Canadian missionaries or those required to be out of the country for occupational reasons will be able to consider their term of absence from the country as having been spent in the country.
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Mrs. Fairclough:: I was rather relieved to hear the minister say that the tattooed gentleman had been able to produce documentary proof, because I presume that if he had not, following the precedent set by the department, he would have had to amputate his limb and send it to the provincial capital. I am gravely concerned about those people who are unable to furnish proof of age. All of us are acquainted with those who are unable to prove age other than by having copies made of documents which sometimes are too hefty or unwieldy to be shipped to a point some distance away. I wonder if the department would not be prepared to pay the express charges in these cases. Many of these people simply cannot afford to ship a 25-pound document two or three hundred miles. These are all problems which bother elderly people.
I know of many members of the legal profession who have gone to the homes of aged people to examine documents and make copies because it was impossible for those people to transport the heavy documents to their offices. It would cost them money to hire a taxicab. I know that even in Ontario there were many births 40 or 45 or more years ago that were not registered. I ran into a case along this line not long ago, when some people were attempting to secure proof of age in order to obtain United States citizenship. Their births had not been registered and they were unable to secure the necessary evidence in order to obtain naturalization papers. If the minister is not prepared to yield on this point I suggest that there be appointed in each municipality a local authority to examine documents and certify to their authenticity, and thus relieve the anxiety of these old people.
I have in my hand a letter from a gentleman who would be well known to many hon. members of this house, because for twelve years he was a member. He is a former member of the tariff board, and I think his word can be taken as a parliamentarian and a gentleman. He writes:
I am one of those who made application over two months ago following departmental requests to send application in early. I was born Jan. 21, 1881, being now over 70 years of age. I forwarded my birth certificate and never dreamed but that this would be acceptable proof of age. To my amazement I received a letter October 3 from Mr. F. C. Jackson, regional director, in which he says:
"Unfortunately this document does not present acceptable proof that you are over seventy years of age and it is not possible, therefore, to approve your application for payment, without further evidence."
If this does not present proof of age, in the name of heaven, what does?
I repeat, if that is not proof of age, what is?
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Paul Joseph James Martin: Will my hon. friend send me that letter?


Mr. Cardiff:: I come from a part of the country where our senior citizens live to be very old, and in most cases they retain their intelligence almost until death. An old gentleman came to me the other day, or rather a young gentleman of 69 years, and told me that he could not find any trace of the registration of his birth; however, he said that he had an affidavit from his godmother who was with his mother when he was born. Would that be acceptable?


Paul Joseph James Martin: As I was reading the letter sent to me by the hon. member for Hamilton West I did not follow my hon. friend. I shall note what he said.


Frederick Davis Shaw: What policy is pursued in connection with treaty and non-treaty Indians as to proof of age, and what has been the experience up to the present time?


Paul Joseph James Martin: Our experience with Indians has been very good. We are operating through the Indian affairs service and are fortunate to have the advantage of the assistance of Indian agents and so on. We are not experiencing undue difficulty.


Frederick Davis Shaw: What possible evidence could there be in connection with non-treaty Indians. Have you had no difficulty at all?


Paul Joseph James Martin: I said no undue difficulty.


Frederick Davis Shaw: I shall have to examine the minister's dictionary.


Donald Methuen Fleming: Would the minister clarify the situation in regard to applications pending? We know that some 305,000 were taken over from the provinces in connection with which age had been admitted. The minister said that up to October 23 an additional 277,000 applications had been received. How many have actually been reviewed, that is either approved or rejected?


Paul Joseph James Martin: The revised figures as of last night show applications received in the number of 284,239. Of that number, 174,953 have been approved. A total of 109,000 applications are now in hand and have still to be approved. We estimate that possibly 15 per cent of those will require further verification or submission of evidence. That leaves roughly about 95,000 applications still to be received. On the basis of three months yet to come it would appear that we would be well within our mark in the light of our experience of the previous three months.


Donald Methuen Fleming: As I understand the minister's reply, he is saying that of the remaining applications standing for review about 15 per cent are likely to require further proof.


Paul Joseph James Martin: That would be on the basis of our experience with regard to the others.


Donald Methuen Fleming: In how many cases to date have applications been rejected?


Paul Joseph James Martin: I could not give that figure offhand. I have not that information. I will get it.


Donald Methuen Fleming: Is it a significant figure?


Paul Joseph James Martin: No.


Mr. Macdonnell (Greenwood):: Not undue.


Paul Joseph James Martin: Not undue.


Donald Methuen Fleming: I presume the minister can get that figure and give it.


Paul Joseph James Martin: I will give it when we come to the bill.


Howard Charles Green: Earlier in the discussion there was some mention of recipients of war veterans allowance. The Minister of Veterans Affairs is in the house now, and I think it would be in the interests of the veterans and the public generally if between them these two ministers would make clear exactly what the result will be for two classes of veterans. In the first place there is the veteran who is in receipt of a disability pension, and in the second place the veteran who is getting the war veterans allowance. I understood the Minister of National Health and Welfare to say that everyone over 70 would qualify automatically for the $40 pension, but when he was asked what effect that would have on the veteran who was drawing the war veterans allowance the reply was that that would have to be answered by the Minister of Veterans Affairs, or would be decided when a special committee on veterans affairs is set up during the 1952 session of the house.
I do not believe a reply of that kind is satisfactory. I should like to know whether, in the case of a veteran who is drawing a disability pension and is 70 years of age, he will get the old age pension and also his disability pension. Furthermore, if he is in receipt of the unemployability supplement, will he continue to get that supplement? During the meetings of the special committee on veterans affairs last spring we were told he would not, but I should like to have that cleared up now.
Secondly, where a veteran is drawing the war veterans allowance is he going to lose that allowance because he gets the old age pension? Surely these two questions must have been considered by the government before this legislation was brought down. I repeat that it would be in the interests of everyone if that information were given tonight.


Mr. Lapointe:: With respect to the pensioner in receipt of a disability pension under the Pension Act, he will be entitled to the universal old age pension as mentioned by my colleague.


Howard Charles Green: Louder.


Hugues Lapointe: I said that, upon reaching the age of 70 and meeting the other requirements of the act, he would be eligible for the old age security pension the same as any other citizen.


Howard Charles Green: As well as for his other pension?


Hugues Lapointe: With regard to the recipient of the war veterans allowance, as my hon. friend knows the War Veterans Allowance Act establishes a ceiling of permissible income in the same way as the present old age assistance acts. Under the new old age security legislation, old age security payments are going to be considered as income. They shall not be deductible from the war veterans allowance payments as such. I might give an illustration: let us take the case of a veteran who is single and in receipt of the war veterans allowance of $40; with the present ceiling existing in the act, which is $600, the veteran should apply for his old age security payment upon reaching 70. He would receive $40 a month, and with respect to war veterans allowance if he does not have any other source of income he would be entitled to receive the difference between $480, which is twelve times $40 a month, and the ceiling of $600. That is what will take place.


Howard Charles Green: That is $10 a month.


Hugues Lapointe: That is right. Actually I
think it is $10 and some odd cents. That is what will take place, when this legislation comes into force, under the terms of the present War Veterans Allowance Act.


Howard Charles Green: Is the pensioner who is in
receipt of an unemployability supplement to be eligible also for old age pension or will he lose his unemployability supplement?


Hugues Lapointe: That matter is being considered at the present time, and I will be giving an answer on that question.


Howard Charles Green: The war veterans allowance
is paid to the front line veteran at 60 years of age on the presumption that he was pre-aged ten years by his fighting service. The new old age pension has no means test. Is the means test to be retained for the war veterans allowance recipient, and if so, why?


Hugues Lapointe: At the present time it is,
but that is one of the questions which I hope the special committee on veterans affairs will look into when it is set up during the next 94699-271
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regular session. The whole War Veterans Allowance Act will be submitted to it, as I announced some days ago.


Mr. Fulton:: Will they have any power to deal with it?


Hugues Lapointe: I said it would be submitted to them. If my hon. friend had read my announcement he would have understood that is the purpose of setting up the committee.


Edmund Davie Fulton: Similar committees have been set up before without any powers.


Herbert Wilfred Herridge: Will all persons who are
now receiving pensions under the terms of the Pension Act be entitled to the old age security payment provided they can fulfil the requirements of the old age security legislation?


Hugues Lapointe: The answer is yes.


Mr. Churchill:: I have been trying to get
in a word for half an hour with respect to the war veterans allowance, and perhaps this is my opportunity. As I understand it this will be the only group in the country that will receive rather different treatment. I think further consideration will have to be given to this matter, and the assurance surely must be given that people receiving war veterans allowance will benefit in the same way as others who are drawing pensions of one sort or another. This measure has been advertised as a security scheme without a means test, yet it seems to me that the means test is being applied with regard to this one group.


Hugues Lapointe: Oh, no. If I may interrupt
my hon. friend, what I said in answer to the hon. member for Vaneouver-Quadra was that the means test was still in the War Veterans Allowance Act, but it certainly does not exist as far as old age security payments are concerned for any recipient of war veterans allowance who reaches the age of 70.


Gordon Minto Churchill: Perhaps I did not make
myself clear. The point I was trying to make was that this security plan is advertised to be without a means test. That is one of the great features of it. People who are eligible in other respects, and who are drawing war veterans allowances, are going to find that notice will be taken of the fact that they are drawing money under the War Veterans Allowance Act, and consequently their income is going to be reduced. The income of no other group drawing pensions or retirement allowances will be reduced.


Hugues Lapointe: It is going to be increased
by $10.


Gordon Minto Churchill: It will not be reduced, but those who have been expecting that they would benefit to the extent of the pension

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are now going to be disappointed. I would point out that we have a figure of 700,000 indicated as the possible number who will be eligible for this old age pension without a means test. This group on war veterans allowance is rather small. The report of the Department of Veterans Affairs indicates that there are 26,635 who are receiving the war veterans allowances and who are 60 years of age and over. They cannot all be over 70 years of age, though the statistics do not indicate that.


Hugues Lapointe: Some are under 60.


Gordon Minto Churchill: There are a few, but not many.


Hugues Lapointe: We have some who are only 31 years of age.


Gordon Minto Churchill: We can assume the majority are 60 years of age and over. We can assume that perhaps half are 70 years of age. You get a group, therefore, of about 12,000 or 13,000 persons who are being set apart from this whole scheme, and a different type of arrangement is being made with regard to them. I suggest that does not make sense when you are dealing with 700,000 people across the country.


Howard Charles Green: Mr. Chairman, as I understand the statement made by the Minister of Veterans Affairs, the position will be this. If a war veterans allowance recipient has no other income, then he will get $50 a month instead of $40. That is correct, is it not?


Hugues Lapointe: Yes; he will get his $40 a month under the old age security legislation, and the difference between that and $600 per year from the war veterans allowance.


Howard Charles Green: He will get his old age pension but he will lose $30 of his war veterans allowance.


Hugues Lapointe: At the present time.


Howard Charles Green: That will be bringing him up to a total of $50, but if he has any other income or if he is only eligible for partial v/ar veterans allowance, then he will get absolutely no benefit from the old age pension. His income will not be increased at all.


Douglas Charles Abbott: But this pension is income just the same as any other type of income in the hands of veterans. It is going to be subject to tax, and that is the fundamental principle of this new old age security program. The $40 is taxable income in the hands of every recipient. That is a very simple principle, and it carries with it all the consequences of its being taxable income.


Howard Charles Green: The Minister of Finance has not dealt with the point I have raised. If

the veteran has other income or if he is only able to qualify for partial war veterans allowance-


Hugues Lapointe: Because he has other income.


Howard Charles Green: -because he has other income, then he will not get any benefit whatever from the old age pension.


Hugues Lapointe: He will be getting his old age pension, but he will not get any war veterans allowance.


Howard Charles Green: He will get his old age pension, but he will not get any war veterans allowance.


Douglas Charles Abbott: What we have to remember is that it has always been recognized that the War Veterans Allowance Act provides a special type of old age pension to veterans at a lower age limit, and with certain other advantages including medical treatment. It has been considered as a form of old age pension at a lower age, of course, for the reasons that have been indicated by some of the previous speakers. It has always been subject to the means test in the same way as the old age assistance which is going to continue to be shared jointly by the provinces, and which will continue to be subject to the means test. The old age pension is paid without a means test to everyone, and it is taxable income in the hands of the person who receives it.


James MacKerras Macdonnell: Surely this point still arises, and I am not for a moment expressing an opinion as to what should be done. Let us be clear as to what happens. It is correct to say that here you have two men, one with a private income of $480 arising we will not say how, and the other a veteran with an income of $480 which he gets under the War Veterans Allowance Act. At the present time they are both in the same position. Then along comes the old age security measure, and the man who has the $480 arising by whatever means will get the $480 in addition, but the veteran only gets $120. For the moment I am not expressing any opinion, except to add that what the member for Winnipeg South Centre has said is true. In that way we are discriminating against the man under the war veterans allowance. You may say he is in a different position in that he already derives his income from an allowance and he should be treated differently. I am merely pointing out that these two men are treated differently.


Douglas Charles Abbott: In just the same way as if the recipient of the war veterans allowance came into a legacy and had an income, then his war veterans allowance would be reduced

proportionally. This payment is a payment as of right which is being contributed to by everybody, and the theory is that it is not charity. It is not being given out of somebody else's money, but is being given out of contributions that are made by people who can make them. We had to maintain a principle in this thing, and that is the principle. Another principle is, as I have said before, that it is taxable income, and the people in the relatively high income bracket are going to get very little benefit from the old age pension. Those in the highest bracket will get virtually nothing.


Mr. Brooks:: This problem arises, of course, because last year the war veterans committee could not consider the matter of the war veterans allowance. The whole difficulty is that this $600 ceiling is too low. It does seem to me it is very unfair to these war veterans to say that they now have to wait until 1952 before the War Veterans Allowance Act will be considered.


Douglas Charles Abbott: They will not get the new pension until 1952 either.


Alfred Johnson Brooks: These men are in a different category altogether. If we do not consider the matter until 1952, it may be late in 1952 or 1953 before it is remedied. I believe something should be done at once to raise the ceiling so these men would be treated in much the same manner as every other citizen of this country.


Mr. Cruickshank:: May I ask the Minister of Veterans Affairs, if a war veteran decides to apply for the old age pension will he lose his hospital rights or will he still be considered as a war veteran?


Mr. Lapoinie:: Any recipient of war veterans allowance who, because he starts to receive old age security payments stops receiving payments under the War Veterans Allowance Act, may continue to have the same medical treatment.


Mr. Johnston:: The question I had in mind was similar to the one asked by the member for Fraser Valley. I believe the problem that is going to concern the veteran is whether he should apply for old age pension, having in mind that he will receive no more than the $40 he is getting from the veterans allowance, if his medical benefits are going to be reduced. It may be that the veteran will not receive or does not receive a great deal in the way of medical benefits at the moment, but next year he may require a great deal of medical treatment. I understand the minister to state that even if the war veterans allowance is reduced to zero, so long as he is qualified under the War Veterans Allowance
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Act he will continue to receive all the benefits for which he is qualified under that act.


Hugues Lapointe: So long as he is in the same financial position, if I may use that expression, as when he was a recipient of the war veterans allowance.


Charles Edward Johnston: Does that mean he will have to go back periodically for an examination under the War Veterans Allowance Act to ascertain whether or not he is qualified to receive that allowance?


Arthur-Joseph Lapointe: The situation will not be changed at all so far as he is concerned, except that he will be getting $40 under the old age security. As regards medical treatment, it will be exactly the same situation that exists now.


George Harris Hees: As the allowable income for old age security was raised from the old ceiling of $600 to $720, is it not reasonable now, with the rise in the cost of living, to raise the allowable income ceiling for war veterans allowance from $600 to $720?


Arthur-Joseph Lapointe: That is one of the points that will be considered when the War Veterans Allowance Act is looked into at the next session. As I mentioned before when I made that announcement, such a change can be made retroactive to January 1, 1952, which will be the date of the coming into force of this act, so there will be no difference in the application of the two acts.


Ellen Louks Fairclough: May I ask the Minister of Veterans Affairs whether these same rules apply to the non-pensioned war widows as well?


Hugues Lapointe: I have not looked at the problem from their point of view particularly. There are certain differences as far as they are concerned. I shall be glad to look more thoroughly into the matter and let my hon. friend know.


Ellen Louks Fairclough: I should be glad if the minister would look into it.


Hugues Lapointe: Yes. That matter will be studied at the same time.


Stanley Howard Knowles: I should like to ask a few questions of two of the ministers and of one of the parliamentary assistants. May I deal with the parliamentary assistant first; and I am referring to the parliamentary assistant to the Minister of Transport, to whom I should like to address a question in the absence of his minister. If he is not in a position to deal with it I am sure he will draw it to the attention of the minister. I refer to the matter I mentioned when I was speaking this afternoon, namely that clause

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9 of the rules and regulations of the Canadian National Railways pension fund specifies-


Douglas Charles Abbott: Order.


Stanley Howard Knowles: Just a minute. This is perfectly in order. Clause 9 specifies that no one can receive that pension if he is in receipt of a pension where such pension or allowance is contributed to wholly or in part by the company or by the government of Canada, except war pensions. I put the whole of that clause upon the record this afternoon. My point is that, as that rule reads, it would seem to be clear that recipients of Canadian National Railways pensions would lose those pensions-


Mr. Gibson:: It is not a government pension.


Mr. Sinclair:: Another parliamentary assistant.


Stanley Howard Knowles: Just a minute. The hon. member for Comox-Alberni has been paying as much attention as has the Minister of Finance. As I say, the recipients of Canadian National Railways pensions would lose those pensions-and particularly the basic pension of $25 a month-if some change is not made in that rule. If I may quote the rule again for the benefit of the hon. member for Comox-Alberni, it says that a Canadian National Railways pension is not receivable by a person who is in receipt of a pension which is contributed to wholly or in part by the government of Canada.
It is obvious that this problem will have to be looked into. I may say quite frankly that I think it is the intention of the government that there shall be no loss of those pensions, and that this $40 shall be received by Canadian National pensioners in addition to what they are now receiving. But it is a point that I think should be looked into and I would refer it to the Minister of Transport or ask that the parliamentary assistant take it up with the Minister of Transport.


Mr. Benidickson:: My hon. friend will recall that at the last session the president of the Canadian National Railways advised the committee on railways and shipping owned and operated by the government that the representatives of the union and the management of the C.N.R. were looking forward to some change or the prospect of change in our general pension set-up and, as a result of that, they felt that their whole pension arrangements might be revised. I would think that on second reading the Minister of Transport would be able to answer my hon. friend specifically with respect to changes in legislation if they prove to be necessary.


Charles Edward Johnston: May I ask this question on the same subject that has just been dealt with

by the parliamentary assistant. The section the hon. member for Winnipeg North Centre just read was to the effect that the pension could not be received if the employee was in receipt of a pension which was contributed to by the government. Let me ask the Minister of Finance this question. Is the government contributing? I would think that the government is not contributing in any way whatever.


Douglas Charles Abbott: That is an extremely interesting legal question. Of course the people of Canada are making the contribution. But I will refer my hon. friend's question to the law officers of the crown for a formal answer.


Louis-René Beaudoin: Shall the resolution carry?


Stanley Howard Knowles: I should like to ask a couple of questions of the Minister of National Health and Welfare. From what he said this afternoon am I to understand that when the act is passed it will then be possible to refer to census records for proof of age in future years?


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: In other words, some of the difficulty now being experienced may not be experienced once the act gets into full operation?


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: I know of certain persons who applied for the pension soon after it was so well advertised by the minister- and I thank him for taking that suggestion of mine-and who submitted only one document, namely an acknowledgment of receipt of proof of age by an insurance company. I know of at least one instance where, that having been done, the applicant received back the document and was advised that his application had been approved. Has there been a change so that it is now necessary to submit, along with that, another item? I have in my hand a copy of the suggested proofs of age that the department sends out and I find that acknowledgment of proof of age by an insurance company is included in the group of items where two different documents are required. Has there been any change in that or is it still in order to accept just that one item?


Paul Joseph James Martin: That item would be sufficient.


Stanley Howard Knowles: That item will be sufficient?


Paul Joseph James Martin: Yes.


Stanley Howard Knowles: I suggest that this be drawn to the attention of the hon. member for Lanark. I think he mentioned a case this afternoon in which the one was not sufficient.


Paul Joseph James Martin: Let me have those cases.


Stanley Howard Knowles: The other comment I wish to make is in reply to what the Minister of Finance said earlier in response to the comments by the hon. member for Rosetown-Biggar in support of the view we take that there should not be this $60 ceiling on the tax to be paid under the heading of old age security, so far as well to do persons are concerned. In endeavouring to justify that $60 ceiling the Minister of Finance tonight said that the figure was arrived at because it was approximately the amount which would buy an annuity equal to the old age pension if it was purchased at a certain age. May I suggest that is one of the reasons we take exception to this idea of imposing a ceiling. I have in my hand a copy of the report of last year's parliamentary committee, and in paragraph 38 on page 106 I note this sentence:
The universal pay-as-you-go system of old age security is designed to avoid the chief weaknesses of the insurance approach by assuring benefits to the entire population in the eligible age group. It does not attempt to relate the benefit which an individual receives or the amount of that benefit to the individual record of contributions.


Douglas Charles Abbott: Of course.


Stanley Howard Knowles: I am glad to hear the minister say "of course". Similarly on page 108, where the committee's opinion is set out, under paragraph 51 (a), we say:
A universal pay-as-you-go program applicable to all persons 70 years of age and over, based on the contributory principle and administered by the federal government. The benefit should be a flat, uniform amount of $40 a month for all eligible persons, and eligibility should be based solely on age and a suitable residence qualification.
There are other paragraphs in the report where we referred to the fact that the country will have to face up to the cost of a program of this nature, but we made it crystal clear that in our view the benefits should not be related to any individual record of contributions; indeed, they should not relate to anything other than age and suitable residence qualifications.


Douglas Charles Abbott: Payments, not the contribution.


Stanley Howard Knowles: I feel that to the extent the minister has established that $60 figure and has quoted it as a ceiling, as though it were a proper amount to be paid in, he is departing from the principle of universality that the committee had in mind.
Our thought was, as 1 tried to set out this afternoon, at least as I understood it, that out of the production of this calendar year or this fiscal year, we set aside a certain proportion for old age security to be paid for according to each person's ability to pay. It
Old Age Security
was our view that when you try to relate what a person is going to get by way of pension in terms of dollars in his years of retirement to the amount that is paid in dollars across the years, you are just running into trouble, and to that extent you are departing from the pay-as-you-go universal principle which we laid down; to that extent the minister is giving in to the propaganda for the insurance principle, or for putting this whole pension on an annuity basis. If we are going to have a ceiling at $60 and say that the wealthy man must pay no more than that for his old age security, it means that you get away from the principle of taxing according to ability to pay, and the amount required to pay the pension to those in the lower income brackets has to be found somewhere else. Of course the minister has made it clear that this will be obtained to a fairly substantial extent out of the sales tax. In other words the burden is being put too heavily on those who cannot bear it.
I pleaded as forcefully as I could this afternoon; and the more I have had time to think it over and look at the Income tax set-up and the rates of income tax, and so on, the more I feel that it is a mistake to have that $60 ceiling in this legislation. In fact I think a lot of wealthy people in the country will be surprised-of course pleasantly surprised-to discover that it is to cost them in terms of direct old age security tax only $60 a year; whereas many people with lower income are going to have to pay $30, $40, $50, $55 a year, which is more than they would have to pay if the wealthy paid their full share.
In connection with that, we had a bit of discussion back and forth this afternoon about the position of the millionaire who goes on pension. Before I deal with that may I say the people we are most concerned about, so far as paying is concerned, are those who are still working and earning an income, be it small or large. I contend that they should pay in, not in terms of what they are going to receive when they retire, but in terms of their ability to pay at the time they are earning.
To get back to the case of the millionaire who has retired, it is clear that the only tax on his income that goes into the old age security fund will be the $60 that he pays, plus such portion of his income as is included in the 2 per cent sales tax. The minister pointed out in an interjection-


Douglas Charles Abbott: And the corporate tax.


Stanley Howard Knowles: -quite correctly that the millionaire will pay regular income tax on his

Old Age Security
additional $480 pension at whatever tax rate he is paying at his top bracket. But that money of course will not go into the old age security fund. That will go into the general revenues, and will not show up as part of the revenue that might be treated as for old age security purposes. I mention this just to straighten out between us what I think should be our understanding of the situation with respect to the millionaire who is retired. But I come back to the other. I feel with respect to those who are working, earning and paying income tax for old age security purposes, that their payments ought to be as nearly as possible on an ability to pay basis, and I think the minister vitiates that principle, and places too heavy a burden on those in the lower income brackets, when he says that the wealthy people of the country do not have to pay more than $60 a year.


Douglas Charles Abbott: There is where my hon. friend and I differ completely. I think the system I indicated this afternoon of incorporating essentially the benefit principle is sound. It is not possible, it is not practicable, to do that, and in fact under the proposal I am making those who are well to do pay infinitely more in proportion to what they receive than the lower income group. In the case of the well to do man, if he buys a motorcar for $4,000 or $5,000, he will pay $80 or $100 more in tax right there. In the case of the corporate tax he will pay his share of the higher price of the goods that result. I think what we have to emphasize here, if we really mean that we are making this plan contributory, is to make it fair. To attempt to impose an inordinate proportion of the cost on the income tax payer alone, who represents approximately half the earners of this country, I think is wrong. I feel profoundly that this is wrong. The income tax contribution is only one portion, incidentally one of the smaller portions, of the contribution. The total take, by providing no exemption, would not be substantially increased above the $95 million that I think I mentioned. But the purpose of putting on a ceiling is to endeavour to assure some measure of equity in this plan as between different contributors. I differ profoundly with my friend when he says it should be strictly in accordance with ability to pay. I do not think that is appropriate for a plan of this kind. It is appropriate for taking care of the general revenues of the country, and that is the basis upon which our tax structure is set up; but I do not think it is appropriate for a contributory pension plan of this country where it is paid 
to everybody as of right and without difference between rich and poor, and more particularly where the pension itself is made taxable income. That is where my friend and I differ fundamentally in our approach to the method of obtaining contributions for this fund, and I do not suppose we will ever be able to reconcile our differences. His argument of course leads one irresistibly to the conclusion that pensions of this kind ought to be paid out of general revenue, and that we should play no part in setting up a fund to be shared on the basis of contributions.


Percy Ellis Wright: If the minister says that the basis, or even a fair basis, on which this pension should be paid is the contributory basis, what argument has he for not paying it to our citizens whether or not they continue to reside in Canada? If the minister is right- and he assumes he is-in saying that it is a contributory scheme which is paid for by the citizen, then it is the citizen's by right.


Douglas Charles Abbott: Only contributory, as I
indicated this afternoon, in the sense that a fund is created out of specially imposed, earmarked taxes which are put into a fund, and to which the person becomes entitled when he reaches 70 years of age and has spent a certain proportion of his time in this country. That is the basis upon which the plan was considered by the parliamentary committee. It is the basis upon which it was approved. I must confess that I may be unduly dense, but I can see no connection between the $60 ceiling which is objected to by some of my hon. friends opposite and the principle that someone should get this whether he lives in the country ten days, twenty days, twenty-five years or whatever it may be.


Percy Ellis Wright: That is not my argument at all. The minister just twists things to make a case for himself.


Douglas Charles Abbott: Not intentionally.


Percy Ellis Wright: He is certainly doing it, whether intentionally or not. I am talking about a person who is a citizen of this country, who has lived here and has contributed all his life to this scheme and helped build up the fund. If when he becomes 70 he wishes to go reside in Great Britain or any other part of the world he should receive the payments to which he contributed while he worked in this country, from the fund which he helped to build up for other citizens in this country. I do not see any justice in not being entitled to it.


Clarence Gillis: Apparently the hon. members are not agreed that the replies answer the

questions. I shall ask another question of the Minister of Veterans Affairs. He is not now in his seat, but it will appear in Hansard so that he may read it.


Douglas Charles Abbott: We will bring it to his attention.


Clarence Gillis: I should like to find out where another type of war pensioner may fit into the scheme of old age security. I have in mind dependent parents who receive a pension with a means test as the result of the loss of a son in the services. The pension is received on the ground that the son, had he not been killed, would have contributed to their support. The pension is paid on the means test basis. The parents have no income. There are many of these people throughout Canada, and I am wondering if they will be eligible to receive the old age pension without any reference to the income derived from the source I mentioned?


Paul Joseph James Martin: I shall call that to the attention of the minister.


Mr. MacLean (Queens):: It has been indicated that certain veterans who are now receiving war veterans allowances will forfeit those allowances either in whole or in part when they begin to accept old age pensions. Are there any other sources of income or benefits now being received by individuals from the government which will have to be forfeited when those individuals begin to receive old age pensions?


Douglas Charles Abbott: The War Veterans Allowance Act is a special statute that has been on the statute books for some time. It provides for a scale of war veterans allowances, and that the recipients of those allowances must be subjected to a means test. The new old age pensions legislation is completely separate and has no connection whatsoever with the War Veterans Allowance Act. The recipient of a pension under the new legislation will be receiving income, just as if he were in receipt of a salary or interest on investments or what have you. That income will have to be taken into consideration in determining whether an individual comes within the means test set out in the War Veterans Allowance Act.
It may well be, as indicated by some hon. gentlemen opposite, that the means test ceiling, or the ceiling of permissible income under the War Veterans Allowance Act, should be changed. That whole question will be considered by the special committee which will be set up at the next session, as indicated by my colleague the Minister of Veterans Affairs. If it is concluded that changes should be made, then they might properly be made effective on January 1, the date on which the new old age pension will become operative.
Old Age Security
I know of no other payments or receipts which could be received by recipients of war veterans allowances which would be affected in any way by the provisions of the bill which will be founded on the resolution now being considered.


Mr. Riley:: Will those in receipt of blind pensions be able to make application for the further old age pension?


Paul Joseph James Martin: A blind person seventy years of age who has the required residence, certainly.


Daniel Aloysius Riley: In addition to the blind pension?


Paul Joseph James Martin: No, he cannot have it twice. But the blind person can qualify, like any other person.


Mr. Graydon:: During the last session of parliament I suggested, as the minister may recall, that we might find a better name than "old age security" or "old age assistance", as the case may be. Would the minister give some indication as to the title of the present legislation, and would he state whether a better name has been found?


Paul Joseph James Martin: We have considered my hon. friend's suggestion. After the most careful consideration, and consultation with all concerned, we decided that the present phrase "old age security" was the most satisfactory.


Gordon Graydon: Was there any objection to the expression "national dividend", or "senior citizens' dividend" or "senior citizenship superannuation"?


Paul Joseph James Martin: There were several other
suggestions.


Clarence Gillis: I notice the Minister of Veterans Affairs is in his seat, so he may be prepared now to answer my question. How will the new old age security legislation affect the Pension Act? I understand the minister told the hon. member for Kootenay West that no pension paid under the Pension Act would be affected by this act, and that all in receipt of pensions under that act would qualify. I then proceeded to ask this question: Would dependent parents granted a pension because of the loss of a son in one of the services, and who received such pension under a means test, qualify for the new old age security pension without affecting the pension they now receive as indigent parents?


Hugues Lapointe: I said before that no disability pensioner would see his pension reduced, or that all disability pensioners would be receiving old age security when they qualify by age. Then, as regards people in receipt of dependents' pensions, I would
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point out that this is a different type of pension, one which is awarded by the Canadian pension commission upon evidence of need. In other words it is subject to a certain type of means test.
Perhaps I am thinking out loud when I say that the situation would be somewhat similar to that of the recipient of war veterans allowance. There again the old age security payment will be considered as income. The Canadian pension commission will consider these cases individually, as they do at the present time, and keep in mind always the receipt of $40 a month as the old age security payment, and as income.


Herbert Wilfred Herridge: I am glad to hear the minister's explanation, because my question was this: Would persons being paid pensions under the authority of the Pension Act be affected so far as this legislation is concerned?


Hugues Lapointe: Not the disability pension. The veteran himself who is in receipt of a pension, whatever the percentage of disability may be, will qualify to receive the old age security payment without affecting his pension. Those who are in receipt of a dependents' pension, which is awarded on a completely different basis and which carries with it a means test, as my hon. friend knows, will possibly be considered in the same manner as the recipients of war veterans allowances. That is to say, the Canadian pension commission, in looking into a case to see whether or not a dependent pension should be awarded, will take into consideration the fact that the applicant is in receipt of a $40 a month old age security pension.


Howard Charles Green: Mr. Chairman, that means the dependents are very apt to have their allowances cut, and the same is true of the recipients of the war veterans allowance. It is perfectly clear, from the statement made by the minister earlier this evening, that many of the recipients of the war veterans allowance are going to have their allowances cut. It all adds up to the Canadian veteran getting the small end of the stick on this deal.


Hugues Lapointe: It might add up like that in my hon. friend's mind, but that is not the way it works out.


Howard Charles Green: Who has the floor, Mr. Chairman?


Louis-René Beaudoin: The hon. member for Yancouver-Quadra may continue.


Douglas Charles Abbott: He makes these appeals all the time.


Howard Charles Green: I suggest that this whole question as to the effect of this legislation on veterans should be considered by a special committee on veterans affairs to be set up at this session of parliament. There is no reason at all why all these questions could not be thoroughly reviewed by that special committee on veterans affairs. We are going to be here for another six weeks, and it just is not good enough to put the veterans' side of this problem over until next March or April and be told that perhaps the payments will be made retroactive. The veterans' side of this picture should be straightened out now and not left until next year. I submit to hon. members that there is no reason at all why it should not be dealt with now.


Clarence Gillis: I hope the minister has not given his final decision in this matter. I hope he has just been thinking out loud. When the minister makes the statement that all dependent pensions paid under the Pension Act will be affected in the way he indicates, that is pretty all-inclusive. I am thinking of the widow of a soldier who was killed in service and who receives a dependent pension.


Hugues Lapointe: No.


Clarence Gillis: I am glad to hear the minister say "no". His statement of a moment ago could be construed as meaning that.


Hugues Lapointe: That is a pension as of right.


Mr. Lesage:: That is not a dependent pension.


Hugues Lapointe: It is not considered a dependent pension under the Pension Act.


Clarence Gillis: I am glad to hear the minister clarify that because that is why I got up. His statement seemed rather ambiguous and to me it could mean a lot of things. I still think he should not be too adamant in the matter of dependent parents' pensions. That too is a pension as of right and should be considered as such in the minds of the people who interpret the act. The parents who have lost a son or sons in service often find themselves with no income, and when a pension is granted by the government it should be considered a pension as of right. Their circumstances are largely attributable to the fact that they have lost those who might have supported them had they lived out their normal span of life.
I wish the minister had stated that this matter will be considered by the veterans affairs committee if and when it meets, at this session if possible. I think that is worthy of consideration. I know many people in this category whose only income is the $40 per

month. We have been paying this for twenty-five years in some cases, and I think we should continue it from this fund which is going to be contributed to by the nation as a whole. It would not be a great drain, and it would be a gesture in the right direction.
There is also the matter of compassionate pensions which are paid to widows of veterans whose pension was under 50 per cent. I have in mind a widow with eight children whose veteran husband had a 40 per cent pension. She is left with those children on her hands. She could not get a war veterans allowance or a dependent's pension as of right, so the government gave her a compassionate pension. According to the minister's decision that pension will be affected by this old age security legislation.
I think the minister should give this matter more consideration and not arrive at any final decision. I believe every hon. member is pretty much of the same mind. I do not know much about this as yet, and I am simply trying to feel my way about. After due consideration there are many things we think cannot be done that we find can be done.
Resolution reported, read the second time and concurred in.
Old Age Security
Mr. Martin thereupon moved for leave to introduce Bill No. 13, to provide for old age security.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: In yesterday's Votes and Proceedings there was a motion to set up a special committee to consider railway legislation. That motion will be on tomorrow's order paper and will be proceeded with. We will then take up the following bills on second reading: Bill No. 12, to amend the Railway Act; Bill No. 6, to amend the Canadian National-Canadian Pacific Act; Bill No. 7, to amend the Maritime Freight Rates Act. After second reading those bills will be referred to the special committee on railway legislation. Those bills having been disposed of, we will consider Bill No. 9, respecting the Toronto harbour commissioners and Bill No. 8, to amend the North Fraser Harbour Commissioners Act.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on October 12, 1951.
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[Stage Direction]
Friday, Ociober 26, 1951